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SECOND DIVISION
[G.R. NO. 125008. JUNE 19, 1997]
COMMODITIES STORAGE & ICE PLANT CORPORATION, SPOUSES
VICTOR & JOHANNAH TRINIDAD, PETITIONERS, VS.
COURT OF APPEALS, JUSTICE PEDRO A. RAMIREZ,
CHAIRMAN AND FAR EAST BANK & TRUST
COMPANY, RESPONDENTS.
DECISION
PUNO, J.:
IN THIS PETITION FOR CERTIORARI, PETITIONER SEEKS TO
ANNUL AND SET ASIDE THE DECISION AND RESOLUTION OF THE
COURT OF APPEALS[1] IN CA-G.R. SP NO. 36032 DISMISSING THE
COMPLAINT IN CIVIL CASE NO. 94-72076 BEFORE THE REGIONAL
TRIAL COURT, BRANCH 9, MANILA.
THE FACTS SHOW THAT IN 1990, PETITIONER SPOUSES
VICTOR AND JOHANNAH TRINIDAD OBTAINED A LOAN
OF P31,000,000.00 FROM RESPONDENT FAR EAST BANK & TRUST
COMPANY TO FINANCE THE PURCHASE OF THE STA. MARIA ICE
PLANT & COLD STORAGE IN STA. MARIA, BULACAN. THE LOAN
WAS SECURED BY A MORTGAGE OVER THE ICE PLANT AND THE
LAND ON WHICH THE ICE PLANT STANDS. PETITIONER
SPOUSES FAILED TO PAY THEIR LOAN. THE BANK
EXTRAJUDICIALLY FORECLOSED THE MORTGAGE AND THE ICE
PLANT WAS SOLD BY PUBLIC BIDDING ON MARCH 22,
1993.RESPONDENT BANK WAS THE HIGHEST BIDDER. IT
REGISTERED THE CERTIFICATE OF SALE ON SEPTEMBER 22, 1993
AND LATER TOOK POSSESSION OF THE PROPERTY.
ON NOVEMBER 22, 1993, PETITIONER SPOUSES FILED CIVIL
CASE NO. 956-M-93 AGAINST RESPONDENT BANK BEFORE THE
REGIONAL TRIAL COURT, MALOLOS, BULACAN FOR
REFORMATION OF THE LOAN AGREEMENT, ANNULMENT OF THE
FORECLOSURE SALE AND DAMAGES.[2] THE TRIAL COURT
DISMISSED THE COMPLAINT FOR PETITIONERS' FAILURE TO PAY
THE DOCKET FEES. THE DISMISSAL WAS WITHOUT PREJUDICE TO
REFILING OF THE COMPLAINT.[3]
ON OCTOBER 28, 1994, PETITIONERS FILED CIVIL CASE NO.
94-72076 AGAINST RESPONDENT BANK BEFORE THE REGIONAL
TRIAL COURT, BRANCH 9, MANILA FOR DAMAGES,
ACCOUNTING AND FIXING OF REDEMPTION PERIOD.[4] AS A
PROVISIONAL REMEDY, PETITIONERS FILED ON NOVEMBER 16,
1994 AN "URGENT PETITION FOR RECEIVERSHIP." THEY ALLEGED
THAT RESPONDENT BANK TOOK POSSESSION OF THE ICE PLANT
FORCIBLY AND WITHOUT NOTICE TO THEM; THAT THEIR
OCCUPATION RESULTED IN THE DESTRUCTION OF PETITIONERS'
FINANCIAL AND ACCOUNTING RECORDS MAKING IT
IMPOSSIBLE FOR THEM TO PAY THEIR EMPLOYEES AND
CREDITORS; THE BANK HAS FAILED TO TAKE CARE OF THE ICE
PLANT WITH DUE DILIGENCE SUCH THAT THE PLANT HAS STARTED
EMITTING AMMONIA AND OTHER TOXIC REFRIGERANT
CHEMICALS INTO THE ATMOSPHERE AND WAS POSING A
HAZARD TO THE HEALTH OF THE PEOPLE IN THE COMMUNITY;
THE SPOUSES' ATTENTION HAD BEEN CALLED BY SEVERAL
PEOPLE IN THE BARANGAY WHO THREATENED TO INFORM THE
DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES
SHOULD THEY FAIL TO TAKE ACTION. PETITIONERS THUS PRAYED
FOR THE APPOINTMENT OF A RECEIVER TO SAVE THE ICE PLANT,
CONDUCT ITS AFFAIRS AND SAFEGUARD ITS RECORDS DURING
THE PENDENCY OF THE CASE.[5]
INSTEAD OF AN ANSWER, RESPONDENT BANK FILED ON
NOVEMBER 25, 1994 A "MOTION TO DISMISS AND OPPOSITION
TO PLAINTIFF'S PETITION FOR RECEIVERSHIP." IT ALLEGED THAT
THE COMPLAINT STATES NO CAUSE OF ACTION AND THAT
VENUE HAD BEEN IMPROPERLY LAID. IT ALSO ALLEGED THAT
RULE 59 RECEIVERSHIP
PETITIONERS FAILED TO PAY THE PROPER DOCKET FEES AND
VIOLATED THE RULE ON FORUM-SHOPPING.[6]
IN AN ORDER DATED DECEMBER 13, 1994, THE TRIAL
COURT GRANTED THE PETITION FOR RECEIVERSHIP AND
APPOINTED PETITIONERS' NOMINEE, RICARDO PESQUERA, AS
RECEIVER. THE ORDER DISPOSED AS FOLLOWS:
"WHEREFORE, PREMISES CONSIDERED THE URGENT PETITION FOR
RECEIVERSHIP IS GRANTED AND MR. RICARDO PESQUERA TO
WHOSE APPOINTMENT NO OPPOSITION WAS RAISED BY THE
DEFENDANT AND WHO IS AN ICE PLANT CONTRACTOR,
MAINTAINER AND INSTALLER IS APPOINTED
RECEIVER. ACCORDINGLY, UPON THE FILING AND APPROVAL
OF THE BOND OF TWO MILLION (P2,000,000.00) PESOS WHICH
SHALL ANSWER FOR ALL DAMAGES DEFENDANT MAY SUSTAIN
BY REASON OF THE RECEIVERSHIP, SAID RICARDO PESQUERA IS
AUTHORIZED TO ASSUME THE POWERS OF A RECEIVER AS WELL
AS THE OBLIGATION AS PROVIDED FOR IN RULE 59 OF THE RULES
OF COURT AFTER TAKING HIS OATH AS SUCH RECEIVER.
SO ORDERED."[7]
RESPONDENT BANK ASSAILED THIS ORDER BEFORE THE
COURT OF APPEALS ON A PETITION FOR CERTIORARI. ON
JANUARY 11, 1996, THE COURT OF APPEALS ANNULLED THE
ORDER FOR RECEIVERSHIP AND DISMISSED PETITIONERS'
COMPLAINT FOR IMPROPER VENUE AND LACK OF CAUSE OF
ACTION. THE DISPOSITIVE PORTION OF THE DECISION READS:
"WHEREFORE, THE PETITION FOR CERTIORARI IS
GRANTED. ACCORDINGLY, THE ASSAILED ORDER DATED
DECEMBER 13, 1994 (ANNEX A, PETITION) IS ANNULLED AND SET
ASIDE AND RESPONDENT'S COMPLAINT IN CIVIL CASE NO. 94-
72076 IN THE RESPONDENT COURT (ANNEXES F, PETITION; 4,
COMMENT), IS DISMISSED. COSTS AGAINST RESPONDENTS
EXCEPT THE COURT.
SO ORDERED."
RECONSIDERATION WAS DENIED ON MAY 23,
1996.[8] HENCE, THIS PETITION.
SECTION 1 OF RULE 59 OF THE REVISED RULES OF COURT
PROVIDES THAT:
"SEC. 1. WHEN AND BY WHOM RECEIVER APPOINTED.-- ONE OR
MORE RECEIVERS OF THE PROPERTY, REAL OR PERSONAL,
WHICH IS THE SUBJECT OF THE ACTION, MAY BE APPOINTED BY
THE JUDGE OF THE COURT OF FIRST INSTANCE IN WHICH THE
ACTION IS PENDING, OR BY A JUSTICE OF THE COURT OF
APPEALS OR OF THE SUPREME COURT, IN THE FOLLOWING
CASES:
(A) WHEN THE CORPORATION HAS BEEN DISSOLVED, OR IS
INSOLVENT, OR IS IN IMMINENT DANGER OF INSOLVENCY, OR
HAS FORFEITED ITS CORPORATE RIGHTS;
(B) WHEN IT APPEARS FROM THE COMPLAINT OR ANSWER, AND
SUCH OTHER PROOF AS THE JUDGE MAY REQUIRE, THAT THE
PARTY APPLYING FOR THE APPOINTMENT OF RECEIVER HAS AN
INTEREST IN THE PROPERTY OR FUND WHICH IS THE SUBJECT OF
THE ACTION, AND THAT SUCH PROPERTY OR FUND IS IN
DANGER OF BEING LOST, REMOVED OR MATERIALLY INJURED
UNLESS A RECEIVER BE APPOINTED TO GUARD AND PRESERVE IT;
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(C) WHEN IT APPEARS IN AN ACTION BY THE MORTGAGEE FOR
THE FORECLOSURE OF A MORTGAGE THAT THE PROPERTY IS IN
DANGER OF BEING WASTED OR MATERIALLY INJURED, AND
THAT ITS VALUE IS PROBABLY INSUFFICIENT TO DISCHARGE THE
MORTGAGE DEBT, OR THAT THE PARTIES HAVE SO STIPULATED IN
THE CONTRACT OF MORTGAGE;
(D) AFTER JUDGMENT, TO PRESERVE THE PROPERTY DURING THE
PENDENCY OF THE APPEAL, OR TO DISPOSE OF IT ACCORDING
TO THE JUDGMENT, OR TO AID EXECUTION WHEN THE
EXECUTION HAS BEEN RETURNED UNSATISFIED OR THE
JUDGMENT DEBTOR REFUSES TO APPLY HIS PROPERTY IN
SATISFACTION OF THE JUDGMENT, OR OTHERWISE CARRY THE
JUDGMENT INTO EFFECT;
(E) WHENEVER IN OTHER CASES IT APPEARS THAT THE
APPOINTMENT OF A RECEIVER IS THE MOST CONVENIENT AND
FEASIBLE MEANS OF PRESERVING, ADMINISTERING, OR
DISPOSING OF THE PROPERTY IN LITIGATION."
A RECEIVER OF REAL OR PERSONAL PROPERTY, WHICH IS THE
SUBJECT OF THE ACTION, MAY BE APPOINTED BY THE COURT
WHEN IT APPEARS FROM THE PLEADINGS OR SUCH OTHER
PROOF AS THE JUDGE MAY REQUIRE, THAT THE PARTY APPLYING
FOR SUCH APPOINTMENT HAS (1) AN ACTUAL INTEREST IN IT;
AND (2) THAT (A) SUCH PROPERTY IS IN DANGER OF BEING LOST,
REMOVED OR MATERIALLY INJURED; OR (B) WHENEVER IT
APPEARS TO BE THE MOST CONVENIENT AND FEASIBLE MEANS
OF PRESERVING OR ADMINISTERING THE PROPERTY IN
LITIGATION.[9]
A RECEIVER IS A PERSON APPOINTED BY THE COURT IN
BEHALF OF ALL THE PARTIES TO THE ACTION FOR THE PURPOSE
OF PRESERVING AND CONSERVING THE PROPERTY IN
LITIGATION AND PREVENT ITS POSSIBLE DESTRUCTION OR
DISSIPATION, IF IT WERE LEFT IN THE POSSESSION OF ANY OF THE
PARTIES.[10] THE APPOINTMENT OF A RECEIVER IS NOT A MATTER
OF ABSOLUTE RIGHT. IT DEPENDS UPON THE SOUND DISCRETION
OF THE COURT[11] AND IS BASED ON FACTS AND
CIRCUMSTANCES OF EACH PARTICULAR CASE. [12]
PETITIONERS CLAIM THAT THE APPOINTMENT OF A
RECEIVER IS JUSTIFIED UNDER SECTION 1 (B) OF RULE 59. THEY
ARGUE THAT THE ICE PLANT WHICH IS THE SUBJECT OF THE
ACTION WAS IN DANGER OF BEING LOST, REMOVED AND
MATERIALLY INJURED BECAUSE OF THE FOLLOWING "IMMINENT
PERILS":
"6.1 DANGER TO THE LIVES, HEALTH AND PEACE OF MIND OF
THE INHABITANTS LIVING NEAR THE STA. MARIA ICE PLANT;
6.2 DRASTIC ACTION OR SANCTIONS THAT COULD BE BROUGHT
AGAINST THE PLAINTIFF BY AFFECTED THIRD PERSONS,
INCLUDING WORKERS WHO HAVE CLAIMS AGAINST THE
PLAINTIFF BUT COULD NOT BE PAID DUE TO THE NUMBING
MANNER BY WHICH THE DEFENDANT TOOK THE STA. MARIA ICE
PLANT;
6.3 THE RAPID REDUCTION OF THE ICE PLANT INTO A SCRAP
HEAP BECAUSE OF EVIDENT INCOMPETENCE, NEGLECT AND
VANDALISM."[13]
A PETITION FOR RECEIVERSHIP UNDER SECTION 1 (B) OF
RULE 59 REQUIRES THAT THE PROPERTY OR FUND WHICH IS THE
SUBJECT OF THE ACTION MUST BE IN DANGER OF LOSS,
REMOVAL OR MATERIAL INJURY WHICH NECESSITATES
PROTECTION OR PRESERVATION. THE GUIDING PRINCIPLE IS THE
PREVENTION OF IMMINENT DANGER TO THE PROPERTY. IF AN
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ACTION BY ITS NATURE, DOES NOT REQUIRE SUCH PROTECTION
OR PRESERVATION, SAID REMEDY CANNOT BE APPLIED FOR
AND GRANTED.[14]
IN THE INSTANT CASE, WE DO NOT FIND THE NECESSITY
FOR THE APPOINTMENT OF A RECEIVER. PETITIONERS HAVE
NOT SUFFICIENTLY SHOWN THAT THE STA. MARIA ICE PLANT IS IN
DANGER OF DISAPPEARING OR BEING WASTED AND REDUCED
TO A "SCRAP HEAP." NEITHER HAVE THEY PROVEN THAT THE
PROPERTY HAS BEEN MATERIALLY INJURED WHICH NECESSITATES
ITS PROTECTION AND PRESERVATION.[15] IN FACT, AT THE
HEARING ON RESPONDENT BANK'S MOTION TO DISMISS,
RESPONDENT BANK, THROUGH COUNSEL, MANIFESTED IN OPEN
COURT THAT THE LEAK IN THE ICE PLANT HAD ALREADY BEEN
REMEDIED AND THAT NO OTHER LEAKAGES HAD BEEN
REPORTED SINCE.[16] THIS STATEMENT HAS NOT BEEN DISPUTED BY
PETITIONERS.
AT THE TIME THE TRIAL COURT ISSUED THE ORDER FOR
RECEIVERSHIP OF THE PROPERTY, THE PROBLEM HAD BEEN
REMEDIED AND THERE WAS NO IMMINENT DANGER OF
ANOTHER LEAKAGE. WHATEVER DANGER THERE WAS TO THE
COMMUNITY AND THE ENVIRONMENT HAD ALREADY BEEN
CONTAINED.
THE "DRASTIC SANCTIONS" THAT MAY BE BROUGHT
AGAINST PETITIONERS DUE TO THEIR INABILITY TO PAY THEIR
EMPLOYEES AND CREDITORS AS A RESULT OF "THE NUMBING
MANNER BY WHICH [RESPONDENT BANK] TOOK THE ICE PLANT"
DOES NOT CONCERN THE ICE PLANT ITSELF. THESE CLAIMS ARE
THE PERSONAL LIABILITIES OF PETITIONERS THEMSELVES. THEY DO
NOT CONSTITUTE "MATERIAL INJURY" TO THE ICE PLANT.
MOREOVER, THE RECEIVER APPOINTED BY THE COURT
APPEARS TO BE A REPRESENTATIVE OF
PETITIONERS. RESPONDENT BANK ALLEGES THAT IT WAS NOT
AWARE THAT PETITIONERS NOMINATED ONE MR. PESQUERA AS
RECEIVER.[17] THE GENERAL RULE IS THAT NEITHER PARTY TO A
LITIGATION SHOULD BE APPOINTED AS RECEIVER WITHOUT THE
CONSENT OF THE OTHER BECAUSE A RECEIVER SHOULD BE A
PERSON INDIFFERENT TO THE PARTIES AND SHOULD BE
IMPARTIAL AND DISINTERESTED.[18] THE RECEIVER IS NOT THE
REPRESENTATIVE OF ANY OF THE PARTIES BUT OF ALL OF THEM
TO THE END THAT THEIR INTERESTS MAY BE EQUALLY PROTECTED
WITH THE LEAST POSSIBLE INCONVENIENCE AND EXPENSE. [19]
THE POWER TO APPOINT A RECEIVER MUST BE EXERCISED
WITH EXTREME CAUTION. THERE MUST BE A CLEAR SHOWING OF
NECESSITY THEREFOR IN ORDER TO SAVE THE PLAINTIFF FROM
GRAVE AND IRREMEDIABLE LOSS OR DAMAGE.[20] IT IS ONLY
WHEN THE CIRCUMSTANCES SO DEMAND, EITHER BECAUSE
THERE IS IMMINENT DANGER THAT THE PROPERTY SOUGHT TO BE
PLACED IN THE HANDS OF A RECEIVER BE LOST OR BECAUSE
THEY RUN THE RISK OF BEING IMPAIRED, ENDEAVOURING TO
AVOID THAT THE INJURY THEREBY CAUSED BE GREATER THAN
THE ONE SOUGHT TO BE AVOIDED.[21]
THE COURT OF APPEALS CORRECTLY FOUND THAT THE
TRIAL COURT GRAVELY ABUSED ITS DISCRETION IN ISSUING THE
ORDER FOR RECEIVERSHIP. THE RESPONDENT COURT, HOWEVER,
WENT FURTHER AND TOOK COGNIZANCE OF RESPONDENT
BANK'S MOTION TO DISMISS. AND FINDING MERIT IN THE
MOTION, IT DISMISSED THE COMPLAINT. PETITIONERS NOW
CLAIM THAT THE RESPONDENT COURT SHOULD HAVE
REFRAINED FROM RULING ON THE MOTION TO DISMISS BECAUSE
THE MOTION ITSELF WAS NOT BEFORE IT.[22]
AGAIN, WE REJECT PETITIONERS'
CONTENTION. THE MOTION TO DISMISS IS ANCHORED ON
IMPROPER VENUE, LACK OF CAUSE OF ACTION AND FORUM-
SHOPPING. WE AGREE WITH THE RESPONDENT COURT THAT THE
QUESTION OF VENUE RELATES TO THE PRINCIPAL ACTION AND
IS PREJUDICIAL TO THE ANCILLARY ISSUE OF
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RECEIVERSHIP. ALTHOUGH THE GROUNDS FOR DISMISSAL WERE
NOT SPECIFICALLY RAISED BEFORE THE APPELLATE COURT, THE
SAID COURT MAY CONSIDER THE SAME SINCE THE PETITION FOR
RECEIVERSHIP DEPENDS UPON A DETERMINATION THEREOF.[23]
IN THEIR COMPLAINT, PETITIONERS PRAYED FOR THE
FOLLOWING:
"WHEREFORE, IN VIEW OF THE FOREGOING, IT IS RESPECTFULLY
PRAYED THAT AFTER TRIAL ON THE MERITS JUDGMENT BE
RENDERED:
1. ORDERING THE DEFENDANT TO PAY COMMODITIES ACTUAL
AND COMPENSATORY DAMAGES IN THE AMOUNT OF
PESOS: TWO MILLION FIVE HUNDRED THOUSAND AND 00/100
(P2,500,000.00);
2. ORDERING THE DEFENDANT TO PAY PLAINTIFFS MORAL
DAMAGES IN THE AMOUNT OF PESOS: TWO MILLION AND
00/100 (P2,000,000.00) TO COMPENSATE THE PLAINTIFFS FOR THE
ANXIETY AND BESMIRCHED REPUTATION CAUSED BY THE UNJUST
ACTUATIONS OF THE DEFENDANT;
3. ORDERING THE DEFENDANT TO PAY PLAINTIFFS NOMINAL
AND EXEMPLARY DAMAGES IN THE AMOUNT OF PESOS: FIVE
HUNDRED THOUSAND AND 00/100 (P500,000.00) TO DETER THE
REPETITION OF SUCH UNJUST AND MALICIOUS ACTUATIONS OF
THE DEFENDANT;
4. IN ORDER TO RESTORE THE LEGAL RIGHT OF THE PLAINTIFF
COMMODITIES TO REDEEM ITS FORECLOSED PROPERTY, A RIGHT
WHICH COMMODITIES HAS BEEN UNJUSTLY DEPRIVED OF BY THE
MALICIOUS AND BAD FAITH MACHINATIONS OF THE DEFENDANT,
COMPELLING THE DEFENDANT TO PRODUCE THE CORRECT,
LAWFUL, OFFICIAL AND HONEST STATEMENTS OF ACCOUNT AND
APPLICATION OF PAYMENT.CONCOMITANTLY, ORDERING THE
DEFENDANT TO ACCEPT THE REDEMPTION OF THE FORECLOSED
PROPERTIES PURSUANT TO RULE 39 OF THE REVISED RULES OF
COURT IN CONJUNCTION WITH ACT 3135, WITHIN THE
PRESCRIBED PERIOD FOR REDEMPTION, SAID PERIOD TO
COMMENCE FROM THE DATE OF RECEIPT BY THE PLAINTIFF
COMMODITIES OF THE CORRECT, LAWFUL, OFFICIAL AND
HONEST STATEMENTS OF ACCOUNT AND APPLICATION OF
PAYMENTS;
5. ORDERING THE DEFENDANT TO PAY ATTORNEY'S FEES IN THE
AMOUNT OF PESOS: THREE HUNDRED THOUSAND (P300,000.00);
AND COSTS OF LITIGATION.
OTHER RELIEFS AND REMEDIES JUST AND EQUITABLE UNDER THE
CIRCUMSTANCES ARE LIKEWISE PRAYED FOR."[24]
PETITIONERS PRAY FOR TWO REMEDIES: DAMAGES AND
REDEMPTION. THE PRAYER FOR DAMAGES IS BASED ON
RESPONDENT BANK'S FORCIBLE OCCUPATION OF THE ICE PLANT
AND ITS MALICIOUS FAILURE TO FURNISH THEM THEIR
STATEMENTS OF ACCOUNT AND APPLICATION OF PAYMENTS
WHICH PREVENTED THEM FROM MAKING A TIMELY
REDEMPTION.[25] PETITIONERS ALSO PRAY THAT RESPONDENT
BANK BE COMPELLED TO FURNISH THEM SAID DOCUMENTS,
AND UPON RECEIPT THEREOF, ALLOW REDEMPTION OF THE
PROPERTY. THEY ULTIMATELY SEEK REDEMPTION OF THE
MORTGAGED PROPERTY. THIS IS EXPLICIT IN PARAGRAPH 4 OF
THEIR PRAYER.
AN ACTION TO REDEEM BY THE MORTGAGE DEBTOR
AFFECTS HIS TITLE TO THE FORECLOSED PROPERTY. IF THE
ACTION IS SEASONABLY MADE, IT SEEKS TO ERASE FROM
RULE 59 RECEIVERSHIP
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THE TITLE OF THE JUDGMENT OR MORTGAGE DEBTOR THE LIEN
CREATED BY REGISTRATION OF THE MORTGAGE AND SALE. [26] IF
NOT MADE SEASONABLY, IT MAY SEEK TO RECOVER OWNERSHIP
TO THE LAND SINCE THE PURCHASER'S INCHOATE TITLE TO THE
PROPERTY BECOMES CONSOLIDATED AFTER EXPIRATION OF THE
REDEMPTION PERIOD.[27] EITHER WAY, REDEMPTION INVOLVES
THE TITLE TO THE FORECLOSED PROPERTY. IT IS A REAL ACTION.
SECTION 2 OF RULE 4 OF THE REVISED RULES OF COURT
PROVIDES:
"SEC. 2. VENUE IN COURTS OF FIRST INSTANCE.-- (A) REAL
ACTIONS.-- ACTIONS AFFECTING TITLE TO, OR FOR RECOVERY
OF POSSESSION, OR FOR PARTITION OR CONDEMNATION OF,
OR FORECLOSURE OF MORTGAGE ON, REAL PROPERTY, SHALL
BE COMMENCED AND TRIED IN THE PROVINCE WHERE THE
PROPERTY OR ANY PART THEREOF LIES."[28]
WHERE THE ACTION AFFECTS TITLE TO THE PROPERTY, IT SHOULD
BE INSTITUTED IN THE REGIONAL TRIAL COURT WHERE THE
PROPERTY IS SITUATED. THE STA. MARIA ICE PLANT & COLD
STORAGE IS LOCATED IN STA. MARIA, BULACAN. THE VENUE IN
CIVIL CASE NO. 94-72076 WAS THEREFORE LAID IMPROPERLY.
FINALLY, THERE IS NO MERIT IN PETITIONERS' CLAIM THAT
THE RESPONDENT BANK IS NO LONGER THE REAL PARTY IN
INTEREST AFTER SELLING THE ICE PLANT TO A THIRD PERSON
DURING THE PENDENCY OF THE CASE. SECTION 20 OF RULE 3 OF
THE REVISED RULES OF COURT PROVIDES THAT IN A TRANSFER
OF INTEREST PENDING LITIGATION, THE ACTION MAY BE
CONTINUED BY OR AGAINST THE ORIGINAL PARTY, UNLESS THE
COURT, UPON MOTION, DIRECTS THE TRANSFEREE TO BE
SUBSTITUTED IN THE ACTION OR JOINED WITH THE ORIGINAL
PARTY. THE COURT HAS NOT ORDERED THE SUBSTITUTION OF
RESPONDENT BANK.
IN VIEW WHEREOF, THE DECISION DATED JANUARY 11,
1996 AND RESOLUTION DATED MAY 23, 1996 OF THE COURT OF
APPEALS IN CA-G.R. SP NO. 36032 ARE AFFIRMED. COSTS
AGAINST PETITIONERS.
SO ORDERED.
REGALADO, (CHAIRMAN), ROMERO,
MENDOZA, AND TORRES, JR., JJ., CONCUR.
[1] PENNED BY ASSOCIATE JUSTICE PEDRO A. RAMIREZ AND CONCURRED IN BY ASSOCIATE JUSTICES
QUIRINO D. ABAD-SANTOS, JR. AND EUGENIO S. LABITORIA.
[2] ANNEX 2 TO COMMENT, ROLLO, PP. 191-209.
[3] ANNEX 3 TO COMMENT, ROLLO, PP. 214-217.
[4] ANNEX 4 TO COMMENT, ROLLO, PP. 218-228.
[5] ANNEX 5 TO COMMENT, ROLLO, PP. 235-240.
[6] ANNEX 6 TO COMMENT, ROLLO, PP. 244-257.
[7] ANNEX D TO THE PETITION, ROLLO, P. 63.
[8] ANNEX L TO THE PETITION, ROLLO, P. 142.
[9] RALLA VS. HON. ALCASID, 116 PHIL. 622, 625 [1962].
[10] NORMANDY V. DUQUE, 29 SCRA 385, 391 [1969]; CIA. GENERAL DE TABACOS V. GAUZON, 20 PHIL.
261, 267-268 [1911].
[11] CALO AND SAN JOSE V. ROLDAN, 76 PHIL. 445, 453 [1946]; MENDOZA V. ARELLANO, 36 PHIL. 59, 63-
64 [1917].
[12] DUQUE V. CFI OF MANILA, 13 SCRA 420, 423 [1965]; RALLA V. ALCASID, SUPRA, AT 625; LAMA V.
APACIBLE, 79 PHIL. 68, 73-74 [1947].
[13] ID., URGENT PETITION FOR RECEIVERSHIP, PP. 2-3, ROLLO, PP. 237-238.
[14] CALO AND SAN JOSE V. ROLDAN, SUPRA, AT 453; YSASI V. FERNANDEZ, 23 SCRA 1079
[1968]; COCHINGYAN V. CLORIBEL, 76 SCRA 394, 397 [1977]; YLARDE V. ENRIQUEZ, 78
PHIL. 527, 531 [1947].
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NATIONAL INVESTMENT AND DEVELOPMENT CORPORATION V. JUDGE AQUINO; PHILIPPINE

AN ORAL PARTITION OF THE PROPERTIES AND SEPARATELY
[15]

NATIONAL BANK V. JUDGE AQUINO, 163 SCRA 153, 174 [1988].

APPROPRIATED TO THEMSELVES SAID PROPERTIES.
[16] COMMENT, PP. 7, 14, ROLLO, PP. 171, 178.

[17] COMMENT, P. 8, ROLLO, P. 172. ON MAY 12, 1992, TORCUATO DIED WITH A LAST WILL
[18] ALCANTARA VS. ABBAS, 9 SCRA 54, 58 [1963]; CIA. GENERAL DE TABACOS VS. GAUZON, SUPRA, AT
AND TESTAMENT EXECUTED ON JANUARY 3, 1992. IN REYES V.
267-268; TEAL MOTOR CO. VS COURT OF FIRST INSTANCE OF MANILA, 51 PHIL. 549, 563, COURT OF APPEALS,[3] WE AFFIRMED THE NOVEMBER 29, 1995
567 [1928].
CA DECISION, ADMITTING THE WILL FOR PROBATE.
[19] NORMANDY VS. DUQUE, SUPRA, AT 391.

[20] MENDOZA V. ARELLANO, SUPRA, AT 64.

PETITIONER VIVARES WAS THE DESIGNATED EXECUTOR
OF TORCUATOS LAST WILL AND TESTAMENT, WHILE PETITIONER
DIAZ VS. HON. NIETES, 110 PHIL. 606, 610 [1960]; YLARDE V. ENRIQUEZ, SUPRA, AT 530.
IGNALING WAS DECLARED A LAWFUL HEIR OF TORCUATO.
[21]

[22] PETITION, PP. 6-9, ROLLO, PP. 9-11.

[23] THE APPELLATE COURT MAY CONSIDER AN UNASSIGNED ERROR IF IT IS CLOSELY RELATED TO AN
ERROR PROPERLY ASSIGNED, OR UPON WHICH A DETERMINATION OF THE ERROR
PROPERLY ASSIGNED IS DEPENDENT. (GARRIDO V. COURT OF APPEALS, 236 SCRA 450
[1994]; MEDIDA V. COURT OF APPEALS, 208 SCRA 886, 893 [1992]; ROMAN CATHOLIC
ARCHBISHOP OF MANILA V. COURT OF APPEALS, 198 SCRA 300, 311 [1991]; PHILIPPINE
COMMERCIAL AND INDUSTRIAL BANK V. COURT OF APPEALS, 159 SCRA 24, 31 [1988]).
[24] ANNEX "4" TO COMMENT, COMPLAINT, PP. 10-11, ROLLO, PP. 227-228; EMPHASIS SUPPLIED.
[25] ANNEX "4" TO COMMENT, COMPLAINT, PP. 7-10, ROLLO, PP. 224-227.
[26] THE JUDGMENT OR MORTGAGE DEBTOR REMAINS THE OWNER OF THE MORTGAGED PROPERTY
DURING THE REDEMPTION PERIOD (MEDIDA V. COURT OF APPEALS, 208 SCRA 886, 897
[1992]).
[27] ID., JOVEN V. COURT OF APPEALS, 212 SCRA 700, 709 [1992]; DE CASTRO V. INTERMEDIATE
APPELLATE COURT, 165 SCRA 654, 662 [1988].
RULE 4 HAS SINCE BEEN AMENDED BY ADMINISTRATIVE CIRCULAR NO. 13-95 WHICH TOOK EFFECT
[28]
ON JUNE 20, 1995. SECTION 1 READS:
BELIEVING THAT TORCUATO DID NOT RECEIVE HIS FULL
SHARE IN THE ESTATE OF SEVERINO, PETITIONERS INSTITUTED AN
ACTION FOR PARTITION AND RECOVERY OF REAL
ESTATE BEFORE THE CAMIGUIN RTC, BRANCH 28 ENTITLED JULIO
A. VIVARES, AS EXECUTOR OF THE ESTATE OF TORCUATO J.
REYES AND MILA R. IGNALING, AS HEIR V. ENGR. JOSE J.
REYES AND DOCKETED AS CIVIL CASE NO. 517. WITH THE
APPROVAL OF THE TRIAL COURT, THE PARTIES AGREED THAT
PROPERTIES FROM THE ESTATE OF SEVERINO, WHICH WERE
ALREADY TRANSFERRED IN THE NAMES OF RESPONDENT AND
TORCUATO PRIOR TO THE LATTERS DEATH ON MAY 12, 1992,
SHALL BE EXCLUDED FROM LITIGATION. IN SHORT, WHAT WAS
BEING CONTESTED WERE THE PROPERTIES THAT WERE STILL IN THE
NAME OF SEVERINO.

ON NOVEMBER 24, 1997, FOR THE PURPOSE OF

"SEC. 1. VENUE OF REAL ACTIONS. -- ACTIONS AFFECTING TITLE TO OR POSSESSION OF REAL PROPERTY,
OR INTEREST THEREIN SHALL BE COMMENCED AND TRIED IN THE PROPER COURT WHICH COLLATING THE COMMON PROPERTIES THAT WERE DISPUTED,
HAS JURISDICTION OVER THE AREA WHEREIN THE REAL PROPERTY INVOLVED, OR A THE TRIAL COURT DIRECTED THE FORMATION OF A THREE-MAN
PORTION THEREOF, IS SITUATED."
COMMISSION WITH DUE REPRESENTATION FROM BOTH PARTIES,
AND THE THIRD MEMBER, APPOINTED BY THE TRIAL COURT,
SHALL ACT AS CHAIRPERSON. THE DISPUTED PROPERTIES WERE
SECOND DIVISION THEN ANNOTATED WITH NOTICES OF LIS PENDENS UPON THE
JULIO A. VIVARES AND G.R. NO. 155408 INSTANCE OF PETITIONERS.
MILA G. IGNALING,
PETITIONERS, ON MARCH 15, 2000, PETITIONERS FILED A MOTION TO
PRESENT: PLACE PROPERTIES IN LITIGATION UNDER
QUISUMBING, J., CHAIRPERSON, RECEIVERSHIP[4] BEFORE THE TRIAL COURT ALLEGING THAT TO
- VERSUS - CARPIO, THEIR PREJUDICE RESPONDENT HAD, WITHOUT PRIOR COURT
CARPIO MORALES, APPROVAL AND WITHOUT PETITIONERS KNOWLEDGE, SOLD TO
TINGA, AND THIRD PARTIES AND TRANSFERRED IN HIS OWN NAME SEVERAL
VELASCO, JR., JJ. COMMON PROPERTIES. PETITIONERS ALSO AVERRED THAT
ENGR. JOSE J. REYES, PROMULGATED: RESPONDENT FRAUDULENTLY ANTEDATED, PRIOR TO MAY 12,
RESPONDENT. 1992, SOME CONVEYANCES AND TRANSFERS TO MAKE IT
FEBRUARY 13, 2008 APPEAR THAT THESE WERE NO LONGER PART OF THE ESTATE OF
X---------------------------------------------------------------------------------------X SEVERINO UNDER LITIGATION. THEY FURTHER CLAIMED THAT
RESPONDENT WAS AND IS IN POSSESSION OF THE COMMON
DECISION PROPERTIES IN THE ESTATE OF SEVERINO, AND EXCLUSIVELY
ENJOYING THE FRUITS AND INCOME OF SAID PROPERTIES AND
WITHOUT RENDERING AN ACCOUNTING ON THEM AND
VELASCO, JR., J.:
TURNING OVER THE SHARE PERTAINING TO TORCUATO. THUS,
PETITIONERS PRAYED TO PLACE THE ENTIRE DISPUTED ESTATE OF
THE CASE
SEVERINO UNDER RECEIVERSHIP. THEY NOMINATED A CERTAIN
THE KERNEL DISPUTE IN THIS PETITION UNDER RULE 45 IS
LOPE SALANTIN TO BE APPOINTED AS RECEIVER.
THE LEGALITY OF THE MAY 22, 2001 RESOLUTION[1] OF THE
CAMIGUIN REGIONAL TRIAL COURT (RTC), BRANCH 28 IN CIVIL
ON MARCH 23, 2000, RESPONDENT FILED HIS
CASE NO. 517, WHICH PLACED THE ESTATE OF SEVERINO REYES
OPPOSITION TO PLACE THE ESTATE OF SEVERINO REYES UNDER
UNDER RECEIVERSHIP. THE COURT OF APPEALS (CA) SAW IT
RECEIVERSHIP,[5] DENYING THAT HE HAD FRAUDULENTLY
DIFFERENTLY IN CA-G.R. SP NO. 67492ITS JUNE 18, 2002
TRANSFERRED ANY PROPERTY OF THE ESTATE OF SEVERINO AND
DECISION[2] RECALLED THE RTC DIRECTIVE ON THE
ASSERTING THAT ANY TRANSFER IN HIS NAME OF SAID
APPOINTMENT OF THE RECEIVER, PROMPTING JULIO VIVARES
PROPERTIES WAS A RESULT OF THE ORAL PARTITION BETWEEN
AND MILA IGNALING TO FILE THE PETITION AT BAR TO
HIM AND TORCUATO THAT ENABLED THE LATTER AS WELL TO
CONVINCE THE COURT TO REINSTATE THE RECEIVERSHIP.
TRANSFER SEVERAL COMMON PROPERTIES IN HIS OWN NAME.
THE FACTS
ON MAY 24, 2000, PETITIONERS FILED THEIR OFFER OF
EXHIBITS IN SUPPORT OF THEIR MOTION FOR RECEIVERSHIP. ON
SEVERINO REYES WAS THE FATHER OF RESPONDENT
THE SAME DATE, THE TRIAL COURT ISSUED AN
JOSE REYES AND TORCUATO REYES. UPON THE DEATH OF
ORDER[6]GRANTING PETITIONERS MOTION AND APPOINTED
SEVERINO, RESPONDENT AND TORCUATO CAME UPON THEIR
SALANTIN AS RECEIVER CONDITIONED ON THE FILING OF A PHP
INHERITANCE CONSISTING OF SEVERAL PROPERTIES. THEY HAD
50,000 BOND. RESPONDENT FILED A MOTION FOR

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RECONSIDERATION, CONTENDING THAT THE APPOINTMENT OF
A RECEIVER WAS UNDULY PRECIPITATE CONSIDERING THAT HE
WAS NOT REPRESENTED BY COUNSEL AND THUS WAS DEPRIVED
OF DUE PROCESS.
ON AUGUST 4, 2000, THE TRIAL COURT ALLOWED
RESPONDENT TO PRESENT HIS EVIDENCE TO CONTEST
PETITIONERS GROUNDS FOR THE APPOINTMENT OF A RECEIVER,
AND THE TRIAL COURT SET THE RECEPTION OF RESPONDENTS
EVIDENCE FOR SEPTEMBER 4, 2000. HOWEVER, ON AUGUST 24,
2000, RESPONDENT FILED A MOTION FOR POSTPONEMENT OF
THE SEPTEMBER 4, 2000 SCHEDULED HEARING ON THE GROUND
THAT HE WAS IN THE UNITED STATES AS EARLY AS JULY 23, 2000
FOR MEDICAL EXAMINATION. ON SEPTEMBER 5, 2000, THE TRIAL
COURT DENIED RESPONDENTS MOTION FOR POSTPONEMENT
AND REINSTATED ITS MAY 24, 2000 ORDER.
ON SEPTEMBER 19, 2000, RESPONDENT FILED A
MANIFESTATION WITH MOTION TO DISCHARGE RECEIVER,
REITERATING THE CIRCUMSTANCES WHICH PREVENTED HIM
FROM ATTENDING THE SEPTEMBER 4, 2000 HEARING AND
PRAYING FOR THE DISCHARGE OF THE RECEIVER UPON THE
FILING OF A COUNTERBOND IN AN AMOUNT TO BE FIXED BY THE
COURT IN ACCORDANCE WITH SECTION 3, RULE 59 OF THE 1997
REVISED RULES ON CIVIL PROCEDURE. ON OCTOBER 10, 2000,
PETITIONERS FILED THEIR UNDATED OPPOSITION TO MOTION TO
DISCHARGE RECEIVER.
SUBSEQUENTLY, RESPONDENT FILED A MOTION TO
CANCEL NOTICE OF LIS PENDENS WHICH WAS ANNOTATED ON
TAX DECLARATION (TD) NO. 112 COVERING LOT NO. 33
ALLEGEDLY BELONGING EXCLUSIVELY TO HIM. RESPONDENT
ASSERTED IN THE MOTION THAT AN ADJACENT PROPERTY TO
LOT NO. 33, PARTICULARLY A PORTION OF LOT NO. 35, WHICH
IS OWNED BY A CERTAIN ELENA UNCHUAN, WAS ERRONEOUSLY
INCLUDED IN LOT NO. 33 AND, CONSEQUENTLY, WAS
SUBJECTED TO THE NOTICE OF LIS PENDENS. PETITIONERS FILED
THEIR OPPOSITION TO THE MOTION TO CANCEL LIS PENDENS.
CONSEQUENTLY, ON MAY 22, 2001, THE TRIAL COURT
ISSUED A RESOLUTION, DENYING RESPONDENTS MOTIONS TO
DISCHARGE RECEIVER AND CANCEL THE NOTICE OF LIS
PENDENS IN TD NO. 112. RESPONDENT SEASONABLY FILED A
PARTIAL MOTION FOR RECONSIDERATION OF THE MAY 22, 2001
RESOLUTION, ATTACHING COPIES OF DEEDS OF SALE EXECUTED
BY TORCUATO COVERING SEVERAL COMMON PROPERTIES OF
THE ESTATE OF SEVERINO TO PROVE THAT HE AND TORCUATO
HAD INDEED MADE AN ORAL PARTITION OF THE ESTATE OF THEIR
FATHER, SEVERINO, AND THUS ALLOWING HIM AND TORCUATO
TO CONVEY THEIR RESPECTIVE SHARES IN THE ESTATE OF
SEVERINO TO THIRD PERSONS.
ON OCTOBER 19, 2001, THE TRIAL COURT HEARD
RESPONDENTS MOTION FOR PARTIAL RECONSIDERATION, AND
ON THE SAME DATE ISSUED AN ORDER DENYING THE MOTION
FOR PARTIAL RECONSIDERATION ON THE GROUND THAT
RESPONDENT FAILED TO RAISE NEW MATTERS IN THE MOTION
BUT MERELY REITERATED THE ARGUMENTS RAISED IN PREVIOUS
PLEADINGS.
AGGRIEVED, RESPONDENT FILED A PETITION FOR
CERTIORARI BEFORE THE CA, ASSAILING THE MAY 22, 2001
RESOLUTION AND OCTOBER 19, 2001 ORDER OF THE RTC.
THE RULING OF THE COURT OF APPEALS
ON JUNE 18, 2002, THE CA RENDERED THE ASSAILED
DECISION, SUSTAINING RESPONDENTS POSITION AND GRANTED
RELIEF, THUS:
WHEREFORE, PREMISES
CONSIDERED, THE PETITION IS
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HEREBY GRANTED. THE RESOLUTION DATED
22 MAY 2001 OF THE REGIONAL TRIAL COURT
OF CAMIGUIN, BRANCH 28 IN CIVIL CASE
NO. 517 IS HEREBY REVERSED AND SET
ASIDE. THE COURT-APPOINTED RECEIVER,
LOPE SALANTIN, IS DISCHARGED UPON THE
POSTING BY PETITIONER OF A
COUNTERBOND IN THE AMOUNT OF
P100,000.00. THE NOTICE OF LIS PENDENS IN
TAX DECLARATION 112, IN SO FAR AS IT
COVERS THE PROPERTY OF ELENA UNCHUAN,
IS CANCELLED. LET THIS CASE BE REMANDED
TO THE COURT A QUO FOR FURTHER
PROCEEDINGS.[7]
IN REVERSING THE TRIAL COURT, THE CA REASONED
THAT THE COURT A QUO FAILED TO OBSERVE THE WELL-SETTLED
RULE THAT ALLOWS THE GRANT OF THE HARSH JUDICIAL
REMEDY OF RECEIVERSHIP ONLY IN EXTREME CASES WHEN
THERE IS AN IMPERATIVE NECESSITY FOR IT. THE CA THUS HELD
THAT IT IS PROPER THAT THE APPOINTED RECEIVER BE
DISCHARGED ON THE FILING OF A COUNTERBOND PURSUANT
TO SEC. 3, RULE 59 OF THE 1997 REVISED RULES ON CIVIL
PROCEDURE.
MOREOVER, THE CA RATIOCINATED THAT
RESPONDENT HAS ADEQUATELY DEMONSTRATED THAT THE
APPOINTMENT OF THE RECEIVER HAS NO SUFFICIENT BASIS, AND
FURTHER HELD THAT THE RIGHTS OF PETITIONERS OVER THE
PROPERTIES IN LITIGATION ARE DOUBLY PROTECTED THROUGH
THE NOTICES OF LIS PENDENS ANNOTATED ON THE TITLES OF THE
SUBJECT PROPERTIES. IN FINE, THE APPELLATE COURT POINTED
OUT THAT THE APPOINTMENT OF A RECEIVER IS A DELICATE ONE,
REQUIRING THE EXERCISE OF DISCRETION, AND NOT AN
ABSOLUTE RIGHT OF A PARTY BUT SUBJECT TO THE ATTENDANT
FACTS OF EACH CASE. THE CA FOUND THAT THE TRIAL COURT
ABUSED ITS DISCRETION IN APPOINTING THE RECEIVER AND IN
DENYING THE CANCELLATION OF THE NOTICE OF LIS
PENDENS ON TD NO. 112, INSOFAR AS IT PERTAINS TO THE
PORTION OWNED BY UNCHUAN.
AGGRIEVED, PETITIONERS IN TURN INTERPOSED A
MOTION FOR RECONSIDERATION THAT WAS DENIED THROUGH
THE ASSAILED SEPTEMBER 24, 2002 CA RESOLUTION.
THUS, THIS PETITION FOR REVIEW ON CERTIORARI IS
BEFORE US, PRESENTING THE FOLLOWING ISSUES FOR
CONSIDERATION:
I
WHETHER OR NOT THE ANNOTATION OF A
NOTICE OF LIS PENDENS PRECLUDES THE
APPOINTMENT OF A RECEIVER WHEN THERE
IS A NEED TO SAFEGUARD THE PROPERTIES IN
LITIGATION.
II
WHETHER OR NOT A DULY APPOINTED
RECEIVER OF PROPERTIES IN LITIGATION
SHOULD BE DISCHARGED SIMPLY BECAUSE
THE ADVERSE PARTY OFFERS TO POST A
COUNTERBOND.
III
Page 5

WHETHER OR NOT THE CANCELLATION OF A
NOTICE OF LIS PENDENS ANNOTATED ON
TAX DECLARATION NO. 112 IS CONTRARY TO
LAW. [8]
THE COURTS RULING
THE PETITION MUST BE DENIED. BEING CLOSELY
RELATED, WE DISCUSS THE FIRST AND SECOND ISSUES TOGETHER.
RECEIVERSHIP NOT JUSTIFIED
WE SUSTAIN THE CA RULING THAT THE TRIAL COURT ACTED
ARBITRARILY IN GRANTING THE PETITION FOR APPOINTMENT OF
A RECEIVER AS THERE WAS NO SUFFICIENT CAUSE OR REASON
TO JUSTIFY PLACING THE DISPUTED PROPERTIES UNDER
RECEIVERSHIP.
FIRST, PETITIONERS ASSEVERATE THAT RESPONDENT ALIENATED
SEVERAL COMMON PROPERTIES OF SEVERINO WITHOUT COURT
APPROVAL AND WITHOUT THEIR KNOWLEDGE AND
CONSENT. THE FRAUDULENT TRANSFERS, THEY CLAIM, WERE
ANTEDATED PRIOR TO MAY 12, 1992, THE DATE OF TORCUATOS
DEATH, TO MAKE IT APPEAR THAT THESE PROPERTIES NO
LONGER FORM PART OF THE ASSETS OF THE ESTATE UNDER
LITIGATION IN CIVIL CASE NO. 517.
PETITIONERS POSITION IS BEREFT OF ANY FACTUAL MOORING.
PETITIONERS MISERABLY FAILED TO ADDUCE CLEAR,
CONVINCING, AND HARD EVIDENCE TO SHOW THE ALLEGED
FRAUD IN THE TRANSFERS AND THE ANTEDATING OF SAID
TRANSFERS. THE FACT THAT THE TRANSFERS WERE DATED PRIOR
TO THE DEMISE OF TORCUATO ON MAY 12, 1992 DOES NOT
NECESSARILY MEAN THE TRANSFERS WERE ATTENDED BY
FRAUD. HE WHO ALLEGES FRAUD HAS THE BURDEN TO PROVE IT.
MOREOVER, RESPONDENT HAS ADDUCED DOCUMENTARY
PROOF THAT TORCUATO HIMSELF SIMILARLY CONVEYED
SEVERAL LOTS IN THE ESTATE OF SEVERINO BASED ON THE ORAL
PARTITION BETWEEN THE SIBLINGS. TO LEND CREDENCE TO THE
TRANSFERS EXECUTED BY TORCUATO BUT DISTRUST TO THOSE
MADE BY RESPONDENT WOULD BE HIGHLY INEQUITABLE AS
CORRECTLY OPINED BY THE COURT A QUO.
INDEED, RECEIVERSHIP IS A HARSH REMEDY TO BE GRANTED
ONLY IN EXTREME SITUATIONS. AS EARLY AS 1914, THE COURT
ALREADY ENUNCIATED THE DOCTRINAL PRONOUNCEMENT
IN VELASCO & CO. V. GOCHUICO & CO. THAT COURTS MUST
USE UTMOST CIRCUMSPECTION IN ALLOWING RECEIVERSHIP,
THUS:
THE POWER TO APPOINT A
RECEIVER IS A DELICATE ONE AND SHOULD
BE EXERCISED WITH EXTREME CAUTION AND
ONLY UNDER CIRCUMSTANCES REQUIRING
SUMMARY RELIEF OR WHERE THE COURT IS
SATISFIED THAT THERE IS IMMINENT DANGER
OF LOSS, LEST THE INJURY THEREBY CAUSED
BE FAR GREATER THAN THE INJURY SOUGHT
TO BE AVERTED. THE COURT SHOULD
CONSIDER THE CONSEQUENCES TO ALL OF
THE PARTIES AND THE POWER SHOULD NOT
BE EXERCISED WHEN IT IS LIKELY TO PRODUCE
IRREPARABLE INJUSTICE OR INJURY TO
PRIVATE RIGHTS OR THE FACTS
DEMONSTRATE THAT THE APPOINTMENT WILL
INJURE THE INTERESTS OF OTHERS WHOSE
RIGHTS ARE ENTITLED TO AS MUCH
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CONSIDERATION FROM THE COURT AS
THOSE OF THE COMPLAINANT. [9]
PETITIONERS CANNOT NOW IMPUGN THE ORAL PARTITION
ENTERED INTO BY TORCUATO AND RESPONDENT AND HENCE
CANNOT ALSO ASSAIL THE TRANSFERS MADE BY RESPONDENT
OF THE LOTS WHICH WERE SUBJECT OF SAID AGREEMENT,
CONSIDERING THAT TORCUATO ALSO SOLD PROPERTIES BASED
ON SAID VERBAL ARRANGEMENT. INDEED, THE PARTIES AGREED
THAT THE CIVIL ACTION DOES NOT ENCOMPASS THE PROPERTIES
COVERED BY THE ORAL PARTITION. IN THIS FACTUAL SETTING,
PETITIONERS CANNOT CONVINCE THE COURT THAT THE
ALLEGED FRAUDULENT TRANSFERS OF THE LOTS MADE BY
RESPONDENT, WHICH PURPORTEDLY FORM PART OF HIS SHARE
IN SEVERINOS ESTATE BASED ON THE PARTITION, CAN PROVIDE
A STRONG BASIS TO GRANT THE RECEIVERSHIP.
SECOND, PETITIONER IS WILLING TO POST A COUNTERBOND IN
THE AMOUNT TO BE FIXED BY THE COURT BASED ON SEC. 3, RULE
59 OF THE 1997 RULES OF CIVIL PROCEDURE, WHICH READS:
SEC. 3. DENIAL OF APPLICATION
OR DISCHARGE OF RECEIVER.THE
APPLICATION MAY BE DENIED, OR THE
RECEIVER DISCHARGED, WHEN THE ADVERSE
PARTY FILES A BOND EXECUTED TO THE
APPLICANT, IN AN AMOUNT TO BE FIXED BY
THE COURT, TO THE EFFECT THAT SUCH PARTY
WILL PAY THE APPLICANT ALL DAMAGES HE
MAY SUFFER BY REASON OF THE ACTS,
OMISSIONS, OR OTHER MATTER SPECIFIED IN
THE APPLICATION AS GROUND FOR SUCH
APPOINTMENT. THE RECEIVER MAY ALSO BE
DISCHARGED IF IT IS SHOWN THAT HIS
APPOINTMENT WAS OBTAINED WITHOUT
SUFFICIENT CAUSE.
ANCHORED ON THIS RULE, THE TRIAL COURT SHOULD
HAVE DISPENSED WITH THE SERVICES OF THE RECEIVER, MORE
SO CONSIDERING THAT THE ALLEGED FRAUD PUT FORWARD TO
JUSTIFY THE RECEIVERSHIP WAS NOT AT ALL ESTABLISHED.
PETITIONERS ADVANCE THE ISSUE THAT THE
RECEIVERSHIP SHOULD NOT BE RECALLED SIMPLY BECAUSE THE
ADVERSE PARTY OFFERS TO POST A COUNTERBOND. AT THE
OUTSET, WE FIND THAT THIS ISSUE WAS NOT RAISED BEFORE THE
CA AND THEREFORE PROSCRIBED BY THE DOCTRINE THAT AN
ISSUE RAISED FOR THE FIRST TIME ON APPEAL AND NOT TIMELY
RAISED IN THE PROCEEDINGS IN THE LOWER COURT IS BARRED
BY ESTOPPEL.[10] EVEN IF WE ENTERTAIN THE ISSUE, THE
CONTENTION IS NEVERTHELESS DEVOID OF MERIT. THE ASSAILED
CA DECISION SUPPORTED THE DISCHARGE OF THE RECEIVER
WITH SEVERAL REASONS INCLUDING THE POSTING OF THE
COUNTERBOND. WHILE THE CA MADE A STATEMENT THAT THE
TRIAL COURT SHOULD HAVE DISCHARGED THE APPOINTED
RECEIVER ON THE BASIS OF THE PROPOSED COUNTERBOND,
SUCH OPINION DOES NOT JIBE WITH THE IMPORT OF SEC. 3,
RULE 59. THE RULE STATES THAT THE APPLICATION MAY BE
DENIED OR THE RECEIVER DISCHARGED. IN STATUTORY
CONSTRUCTION, THE WORD MAY HAS ALWAYS BEEN
CONSTRUED AS PERMISSIVE. IF THE INTENT IS TO MAKE IT
MANDATORY OR MINISTERIAL FOR THE TRIAL COURT TO ORDER
THE RECALL OF THE RECEIVER UPON THE OFFER TO POST A
COUNTERBOND, THEN THE COURT SHOULD HAVE USED THE
WORD SHALL.THUS, THE TRIAL COURT HAS TO CONSIDER THE
POSTING OF THE COUNTERBOND IN ADDITION TO OTHER
REASONS PRESENTED BY THE OFFEROR WHY THE RECEIVERSHIP
HAS TO BE SET ASIDE.
THIRD, SINCE A NOTICE OF LIS PENDENS HAS BEEN ANNOTATED
ON THE TITLES OF THE DISPUTED PROPERTIES, THE RIGHTS OF
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PETITIONERS ARE AMPLY SAFEGUARDED AND PRESERVED SINCE
THERE CAN BE NO RISK OF LOSING THE PROPERTY OR ANY PART
OF IT AS A RESULT OF ANY CONVEYANCE OF THE LAND OR ANY
ENCUMBRANCE THAT MAY BE MADE THEREON POSTERIOR TO
THE FILING OF THE NOTICE OF LIS PENDENS. [11] ONCE THE
ANNOTATION IS MADE, ANY SUBSEQUENT CONVEYANCE OF
THE LOT BY THE RESPONDENT WOULD BE SUBJECT TO THE
OUTCOME OF THE LITIGATION SINCE THE FACT THAT THE
PROPERTIES ARE UNDER CUSTODIA LEGIS IS MADE KNOWN TO
ALL AND SUNDRY BY OPERATION OF LAW. HENCE, THERE IS NO
NEED FOR A RECEIVER TO LOOK AFTER THE DISPUTED
PROPERTIES.
ON THE ISSUE OF LIS PENDENS, PETITIONERS ARGUE THAT THE
MERE FACT THAT A NOTICE OF LIS PENDENS WAS ANNOTATED
ON THE TITLES OF THE DISPUTED PROPERTIES DOES NOT
PRECLUDE THE APPOINTMENT OF A RECEIVER. IT IS TRUE THAT
THE NOTICE ALONE WILL NOT PRECLUDE THE TRANSFER OF THE
PROPERTY PENDENTE LITE, FOR THE TITLE TO BE ISSUED TO THE
TRANSFEREE WILL MERELY CARRY THE ANNOTATION THAT THE
LOT IS UNDER LITIGATION. HENCE, THE NOTICE OF LIS PENDENS,
BY ITSELF, MAY NOT BE THE MOST CONVENIENT AND FEASIBLE
MEANS OF PRESERVING OR ADMINISTERING THE PROPERTY IN
LITIGATION. HOWEVER, THE SITUATION IS DIFFERENT IN THE CASE
AT BAR. A COUNTERBOND WILL ALSO BE POSTED BY THE
RESPONDENT TO ANSWER FOR ALL DAMAGES PETITIONERS MAY
SUFFER BY REASON OF ANY TRANSFER OF THE DISPUTED
PROPERTIES IN THE FUTURE. AS A MATTER OF FACT, PETITIONERS
CAN ALSO ASK FOR THE ISSUANCE OF AN INJUNCTIVE WRIT TO
FORECLOSE ANY TRANSFER, MORTGAGE, OR ENCUMBRANCE
ON THE DISPUTED PROPERTIES. THESE CONSIDERATIONS, PLUS
THE FINDING THAT THE APPOINTMENT OF THE RECEIVER WAS
WITHOUT SUFFICIENT CAUSE, HAVE DEMONSTRATED THE
VULNERABILITY OF PETITIONERS POSTULATION.
FOURTH, IT IS UNDISPUTED THAT RESPONDENT HAS
ACTUAL POSSESSION OVER SOME OF THE DISPUTED PROPERTIES
WHICH ARE ENTITLED TO PROTECTION. BETWEEN THE POSSESSOR
OF A SUBJECT PROPERTY AND THE PARTY ASSERTING
CONTRARY RIGHTS TO THE PROPERTIES, THE FORMER IS
ACCORDED BETTER RIGHTS. IN LITIGATION, EXCEPT FOR
EXCEPTIONAL AND EXTREME CASES, THE POSSESSOR OUGHT
NOT TO BE DEPRIVED OF POSSESSION OVER SUBJECT
PROPERTY. ARTICLE 539 OF THE NEW CIVIL CODE PROVIDES
THAT EVERY POSSESSOR HAS A RIGHT TO BE RESPECTED IN HIS
POSSESSION; AND SHOULD HE BE DISTURBED THEREIN HE SHALL
BE PROTECTED IN OR RESTORED TO SAID POSSESSION BY THE
THE DETERMINATION WHETHER THE PROPERTY OF UNCHUAN IS A
PART OF LOT NO. 33 AND WHETHER THAT PORTION REALLY
BELONGS TO UNCHUAN ARE MATTERS TO BE DETERMINED BY
THE TRIAL COURT. CONSEQUENTLY, THE NOTICE OF LIS
PENDENS ON TD NO. 112 STAYS UNTIL THE FINAL RULING ON
SAID ISSUES IS MADE.
WHEREFORE, THE PETITION IS PARTLY GRANTED. THE
JUNE 18, 2002 CA DECISION IN CA-G.R. SP NO. 67492
IS AFFIRMED WITH MODIFICATIONINSOFAR AS IT ORDERED THE
CANCELLATION OF THE NOTICE OF LIS PENDENS IN TD NO.
112. AS THUS MODIFIED, THE APPEALED CA DECISION SHOULD
READ AS FOLLOWS:
WHEREFORE, PREMISES
CONSIDERED, THE PETITION IS HEREBY PARTLY
GRANTED. THE RESOLUTION DATED 22 MAY
2001 OF THE REGIONAL TRIAL COURT OF
CAMIGUIN, BRANCH 28 IN CIVIL CASE NO.
517 IS HEREBY REVERSED AND SET ASIDE. THE
COURT-APPOINTED RECEIVER, LOPE
SALANTIN, IS DISCHARGED UPON THE
POSTING BY PETITIONER OF A
COUNTERBOND IN THE AMOUNT OF PHP
100,000. THE NOTICE OF LIS PENDENS IN TD
NO. 112, INCLUDING THE PORTION
ALLEGEDLY BELONGING TO ELENA UNCHUAN,
REMAINS VALID AND EFFECTIVE. LET THIS
CASE BE REMANDED TO THE COURT A
QUO FOR FURTHER PROCEEDINGS IN CIVIL
CASE NO. 517.
NO COSTS.
SO ORDERED.
[1] ROLLO, PP. 94-95. PENNED BY PRESIDING JUDGE NOLI T. CATLI.
[2] ID. AT 19-29. PENNED BY ASSOCIATE JUSTICE WENCESLAO I. AGNIRI, JR. AND
CONCURRED IN BY ASSOCIATE JUSTICES B.A. ADEFUIN-DE LA CRUZ (CHAIRPERSON) AND REGALADO E.
MAAMBONG.
[3] G.R. NO. 124099, OCTOBER 30, 1997, 281 SCRA 277.

MEANS ESTABLISHED BY THE LAWS AND THE RULES OF [4] ROLLO, PP. 32-39.

[5] ID. AT 40-41.

COURT. IN DESCALLAR V. COURT OF APPEALS, WE RULED THAT [6] ID. AT 67-68. PENNED BY JUDGE-DESIGNATE ANTONIO A. ORCULLO.

THE APPOINTMENT OF A RECEIVER IS NOT PROPER WHERE THE [7] SUPRA NOTE 2, AT 28.

[8] ROLLO, PP. 212-213.

RIGHTS OF THE PARTIES, ONE OF WHOM IS IN POSSESSION OF [9] 28 PHIL. 39, 41 (1914).

THE PROPERTY, ARE STILL TO BE DETERMINED BY THE TRIAL

[10] PHILIPPINE BANKING CORPORATION V. COURT OF APPEALS, G.R. NO. 127469, JANUARY 15, 2004,

419 SCRA 487, 503-504.

COURT.[12] [11] MEDELO V. GOROSPE, NO. L-41970, MARCH 25, 1988, 159 SCRA 248, 254.
[12] G.R. NO. 106473, JULY 12, 1993, 224 SCRA 566, 569.

IN VIEW OF THE FOREGOING REASONS, WE UPHOLD

THE CA RULING THAT THE GRANT OF THE RECEIVERSHIP WAS
WITHOUT SUFFICIENT JUSTIFICATION NOR STRONG BASIS.

ANENT THE THIRD ISSUE THAT THE CANCELLATION OF THE

NOTICE OF LIS PENDENS ON TD NO. 112 IS IRREGULAR AS LOT
NO. 33 IS ONE OF THE DISPUTED PROPERTIES IN THE PARTITION
CASE, PETITIONERS POSITION IS CORRECT.
THE CA MADE A FACTUAL FINDING THAT THE PROPERTY OF
UNCHUAN WAS ERRONEOUSLY INCLUDED IN LOT NO. 33, ONE
OF THE DISPUTED PROPERTIES IN CIVIL CASE NO. 517. IT THEN
RULED THAT THE ANNOTATION OF LIS PENDENS SHOULD BE
LIFTED.

THIS RULING IS BEREFT OF FACTUAL BASIS.

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THIRD DIVISION
[G.R. NO. 61508. MARCH 17, 1999]
CITIBANK, N.A. (FORMERLY FIRST NATIONAL CITY
BANK), PETITIONER, VS. THE HONORABLE COURT OF
APPEALS AND DOUGLAS F. ANAMA, RESPONDENTS.
DECISION
PURISIMA, J.:
AT BAR IS A SPECIAL CIVIL ACTION FOR CERTIORARI WITH
PRAYER FOR A TEMPORARY RESTRAINING ORDER FAULTING THE
COURT OF APPEALS[1] WITH GRAVE ABUSE OF DISCRETION FOR
NULLIFYING THE LOWER COURTS ORDER OF SEIZURE OF
MORTGAGED PROPERTIES SUBJECT OF A CASE FOR SUM OF
MONEY AND REPLEVIN.
THE FACTS LEADING TO THE INSTITUTION OF THE CASE ARE
AS FOLLOWS:
IN CONSIDERATION FOR A LOAN OBTAINED FROM
CITIBANK, N.A. (FORMERLY FIRST NATIONAL CITY BANK), THE
DEFENDANT (PRIVATE RESPONDENT HEREIN) DOUGLAS ANAMA
EXECUTED A PROMISSORY NOTE, DATED NOVEMBER 10,
1972,[2] TO PAY THE PLAINTIFF BANK THE SUM OF P418,000.00 IN
SIXTY (60) EQUAL SUCCESSIVE MONTHLY INSTALLMENTS
OF P8,722.25, STARTING ON THE 10 TH DAY OF DECEMBER 1972
AND ON THE 10 TH OF EVERY MONTH THEREAFTER. THE SAID
PROMISSORY NOTE STIPULATED FURTHER THAT:
(A) THE LOAN IS SUBJECT TO INTEREST AT THE RATE OF TWELVE
PERCENT (12%) PER ANNUM;
(B) THE PROMISSORY NOTE AND THE ENTIRE AMOUNT THEREIN
STATED SHALL BECOME IMMEDIATELY DUE AND PAYABLE
WITHOUT NOTICE OR DEMAND UPON -
(AA) DEFAULT IN THE PAYMENT OF ANY INSTALLMENT OF
PRINCIPAL OR INTEREST AT THE TIME WHEN THE SAME IS DUE;
(BB) THE OCCURRENCE OF ANY CHANGE IN THE CONDITION
AND AFFAIRS OF THE DEFENDANT, WHICH IN THE OPINION OF
THE PLAINTIFF SHALL INCREASE ITS CREDIT RISK;
(C) THE DEFENDANT AGREES TO PAY ALL COSTS, EXPENSES,
HANDLING AND INSURANCE CHARGES INCURRED IN THE
GRANTING OF THE LOAN;
(D) IN CASE THE SERVICES OF A LAWYER IS MADE NECESSARY
FOR COLLECTION, DEFENDANT SHALL BE LIABLE FOR ATTORNEYS
FEES OF AT LEAST TEN PERCENT (10%) OF THE TOTAL AMOUNT
DUE.[3]
TO SECURE PAYMENT OF THE LOAN, PRIVATE RESPONDENT
ANAMA ALSO CONSTITUTED A CHATTEL MORTGAGE OF EVEN
DATE IN FAVOR OF PETITIONER, ON VARIOUS MACHINERIES
AND EQUIPMENT LOCATED AT NO. 1302 EPIFANIO DELOS
SANTOS AVENUE, QUEZON CITY, UNDER THE FOLLOWING TERMS
AND CONDITIONS:
(A) THE MACHINERIES AND EQUIPMENT, SUBJECT OF THE
MORTGAGE, STAND AS SECURITY FOR DEFENDANTS ACCOUNT.
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(B) ALL REPLACEMENTS, SUBSTITUTIONS, ADDITIONS, INCREASES
AND ACCRETIONS TO THE PROPERTIES MORTGAGED SHALL
ALSO BE SUBJECT TO THE MORTGAGE.
(C) THE DEFENDANT APPOINTS THE PLAINTIFF AS HIS ATTORNEY-
IN-FACT WITH AUTHORITY TO ENTER THE PREMISES OF THE
DEFENDANT AND TAKE ACTUAL POSSESSION OF THE
MORTGAGED CHATTELS WITHOUT ANY COURT ORDER, TO SELL
SAID PROPERTY TO ANY PARTY.
(D) ALL EXPENSES IN CARRYING INTO EFFECT THE STIPULATIONS
THEREIN SHALL BE FOR THE ACCOUNT OF THE DEFENDANT AND
SHALL FORM PART OF THE AMOUNT OF THE OBLIGATION
SECURED BY THE MORTGAGE.
(E) IN CASE THE PLAINTIFF INSTITUTES PROCEEDINGS FOR THE
FORECLOSURE OF THE MORTGAGE, THE PLAINTIFF SHALL BE
ENTITLED TO THE APPOINTMENT OF A RECEIVER WITHOUT A
BOND.
(F) IN CASE OF DEFAULT, THE DEFENDANT SHALL BE LIABLE FOR
ATTORNEYS FEES AND COST OF COLLECTION IN THE SUM EQUAL
TO TWENTY-FIVE PERCENT (25%) OF THE TOTAL AMOUNT OF THE
INDEBTEDNESS OUTSTANDING AND UNPAID.[4]
ON NOVEMBER 25, 1974, FOR FAILURE AND REFUSAL OF
THE PRIVATE RESPONDENT TO PAY THE MONTHLY INSTALLMENTS
DUE UNDER THE SAID PROMISSORY NOTE SINCE JANUARY 1974,
DESPITE REPEATED DEMANDS, PETITIONER FILED A VERIFIED
COMPLAINT AGAINST PRIVATE RESPONDENT ANAMA FOR THE
COLLECTION OF HIS UNPAID BALANCE OF P405,820.52 ON THE
SAID PROMISSORY NOTE, FOR THE DELIVERY AND POSSESSION
OF THE CHATTELS COVERED BY THE CHATTEL MORTGAGE
PREPARATORY TO THE FORECLOSURE THEREOF AS PROVIDED
UNDER SECTION 14 OF THE CHATTEL MORTGAGE LAW,
DOCKETED AS CIVIL CASE NO. 95991 BEFORE THE THEN COURT
OF FIRST INSTANCE OF MANILA.
ON FEBRUARY 20, 1975, THE DEFENDANT ANAMA
SUBMITTED HIS ANSWER WITH COUNTERCLAIM, DENYING THE
MATERIAL AVERMENTS OF THE COMPLAINT, AND
AVERRING, INTER ALIA (1) THAT THE REMEDY OF REPLEVIN WAS
IMPROPER AND THE WRIT OF SEIZURE SHOULD BE VACATED; (2)
THAT HE SIGNED THE PROMISSORY NOTE FOR P418,000.00
WITHOUT RECEIVING FROM PLAINTIFF CITIBANK ANY AMOUNT,
AND WAS EVEN REQUIRED TO PAY THE FIRST INSTALLMENT ON
THE SUPPOSED LOAN IN DECEMBER 1974; (3) THAT THE
UNDERSTANDING BETWEEN HIM AND THE CITIBANK WAS FOR
THE LATTER TO RELEASE TO HIM THE ENTIRE LOAN APPLIED FOR
PRIOR TO AND DURING THE EXECUTION OF HIS PROMISSORY
NOTE, BUT CITIBANK DID NOT DO SO AND, INSTEAD, DELAYED
THE RELEASE OF ANY AMOUNT ON THE LOAN EVEN AFTER THE
EXECUTION OF THE PROMISSORY NOTE THEREBY DISRUPTING HIS
TIMETABLE OF PLANS AND CAUSING HIM DAMAGES; (4) THAT
THE AMOUNT RELEASED BY CITIBANK TO HIM UP TO THE PRESENT
WAS NOT THE AMOUNT STATED IN THE PROMISSORY NOTE, AND
HIS ALLEGED DEFAULT IN PAYING THE INSTALLMENTS ON THE
LOAN WAS DUE TO THE DELAY IN RELEASING THE FULL AMOUNT
OF THE LOAN AS AGREED UPON; (5) THAT THE MACHINERIES
AND EQUIPMENT DESCRIBED IN THE CHATTEL MORTGAGE
EXECUTED BY HIM ARE REALLY WORTH MORE
THAN P1,000,000.00 BUT HE MERELY ACCEDED TO THE
VALUATION THEREOF BY CITIBANK IN SAID DOCUMENT BECAUSE
OF THE LATTERS REPRESENTATION THAT THE SAME WAS
NECESSARY TO SPEED UP THE GRANTING OF THE LOAN APPLIED
FOR BY HIM; (6) THAT THE PROPERTIES COVERED BY SAID
CHATTEL MORTGAGE ARE REAL PROPERTIES INSTALLED IN A
MORE OR LESS PERMANENT NATURE AT
HIS (DEFENDANTS) PREMISES IN QUEZON CITY, AS ADMITTED BY
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CITIBANK IN SAID MORTGAGE DOCUMENT; (7) THAT THE
MORTGAGE CONTRACT ITSELF STIPULATED THAT THE MANNER
AND PROCEDURE FOR EFFECTING THE SALE OR REDEMPTION OF
THE MORTGAGED PROPERTIES, IF MADE EXTRAJUDICIALLY,
SHALL BE GOVERNED BY ACT NO. 1508 AND OTHER PERTINENT
LAWS WHICH ALL PERTAIN TO REAL PROPERTIES; AND (8) THAT
BECAUSE OF THE FILING OF THIS COMPLAINT WITHOUT VALID
GROUNDS THEREFOR, HE SUFFERED DAMAGES AND INCURRED
ATTORNEYS FEES; THE DEFENDANT, NOW PRIVATE RESPONDENT,
AVERRED.
ON DECEMBER 2, 1974, THE TRIAL COURT, UPON PROOF
OF DEFAULT OF THE PRIVATE RESPONDENT IN THE PAYMENT OF
THE SAID LOAN, ISSUED AN ORDER OF REPLEVIN OVER THE
MACHINERIES AND EQUIPMENT COVERED BY THE
CHATTEL MORTGAGE.
HOWEVER, DESPITE THE ISSUANCE OF THE SAID ORDER OF
SEIZURE OF SUBJECT CHATTELS, ACTUAL DELIVERY OF
POSSESSION THEREOF TO PETITIONER DID NOT TAKE PLACE
BECAUSE NEGOTIATIONS FOR AN AMICABLE SETTLEMENT
BETWEEN THE PARTIES WERE ENCOURAGED BY THE TRIAL COURT.
ON MARCH 24, 1975, A PRE-TRIAL CONFERENCE WAS
HELD AND THE LOWER COURT ISSUED AN ORDER FOR JOINT
MANAGEMENT BY THE PETITIONER AND THE PRIVATE
RESPONDENT OF THE LATTERS BUSINESS FOR TEN (10)DAYS,
AFTER WHICH THE FORMER WOULD BE APPOINTED RECEIVER
FOR THE SAID BUSINESS.
ON APRIL 1, 1975, THE PETITIONER TOOK OVER PRIVATE
RESPONDENTS BUSINESS AS RECEIVER. WHEN FURTHER
PROPOSALS TO SETTLE THE CASE AMICABLY FAILED, THE LOWER
COURT PROCEEDED TO TRY THE CASE ON THE MERITS.
ON JANUARY 29, 1977, PETITIONER PRESENTED A MOTION
FOR THE ISSUANCE OF AN ALIAS WRIT OF SEIZURE, ORDERING
THE SHERIFF TO SEIZE THE PROPERTIES INVOLVED AND DISPOSE
OF THEM IN ACCORDANCE WITH THE REVISED RULES OF
COURT. THE LOWER COURT THEN GAVE PRIVATE RESPONDENT
FIVE (5) DAYS TO OPPOSE THE SAID MOTION AND ON FEBRUARY
22, 1977, HE SENT IN HIS OPPOSITION THERETO ON THE
GROUNDS: (1) THAT CITIBANKS P400,000 REPLEVIN BOND TO
ANSWER FOR DAMAGES WAS GROSSLY INADEQUATE BECAUSE
THE MARKET VALUE OF THE PROPERTIES INVOLVED IS P1,710,000
AND THEIR REPLACEMENT COST IS P2,342,300.00 PER THE
APPRAISAL REPORT OF THE APPRAISAL AND RESEARCH CORP.;
(2) THAT HE WAS NEVER IN DEFAULT TO JUSTIFY THE SEIZURE;
(3) THAT THE CIVIL CASE NO. 18071 OF THE COURT OF FIRST
INSTANCE, ENTITLED HERNANDES VS. ANAMA, ET AL., WHICH,
ACCORDING TO CITIBANK, SUPPOSEDLY INCREASED ITS CREDIT
RISK IN THE ALLEGED OBLIGATION, HAD ALREADY BEEN
DISMISSED AS AGAINST HIM AND THE CASE TERMINATED WITH
THE DISMISSAL OF THE COMPLAINT AGAINST THE REMAINING
DEFENDANT, FIRST NATIONAL CITY BANK, BY THE COURT IN ITS
ORDERS OF JANUARY 12, 1977 AND FEBRUARY 7, 1977; (4) THAT
HIS (DEFENDANTS) SUPPOSED OBLIGATIONS WITH CITIBANK
WERE FULLY SECURED AND HIS MORTGAGED PROPERTIES ARE
MORE THAN SUFFICIENT TO SECURE PAYMENT THEREOF; AND (5)
THAT THE WRIT OF SEIZURE IF ISSUED WOULD STOP HIS BUSINESS
OPERATIONS AND CONTRACTS AND EXPOSE HIM TO LAWSUITS
FROM CUSTOMERS, AND ALSO DISLOCATE HIS EMPLOYEES AND
THEIR FAMILIES ENTIRELY DEPENDENT THEREON FOR THEIR
LIVELIHOOD.
ON FEBRUARY 28, 1977, ACTING ON THE SAID MOTION
AND PRIVATE RESPONDENTS OPPOSITION, THE TRIAL COURT
ISSUED AN ORDER GRANTING THE MOTION FOR ALIAS WRIT OF
SEIZURE, RULING THUS:
WHEREFORE , THE MOTION FOR ALIAS WRIT OF SEIZURE IS
HEREBY GRANTED. AT ANY RATE, THIS ORDER GIVES ANOTHER
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OPPORTUNITY FOR DEFENDANT AND THE INTERVENOR WHO
CLAIMS TO BE A PART OWNER TO FILE A COUNTERBOND UNDER
SEC. 60 OF RULES OF COURT.[5]
PRIVATE RESPONDENT MOVED FOR RECONSIDERATION
OF THE AFORESAID ORDER BUT THE SAME WAS DENIED BY THE
RESOLUTION OF MARCH 18, 1977, TO WIT:
IN VIEW OF THE FOREGOING, THE MOTION FOR
RECONSIDERATION IS HEREBY DENIED.
AT ANY RATE, AS ALREADY STATED, THE DEFENDANT HAS STILL A
REMEDY AVAILABLE WHICH IS TO FILE A BOND EXECUTED TO THE
PLAINTIFF IN DOUBLE THE VALUE OF THE PROPERTIES AS STATED
IN THE PLAINTIFFS AFFIDAVIT. THE COURT AT THIS INSTANCE
THEREFORE HAS NO AUTHORITY TO STOP OR SUSPEND THE WRIT
OF SEIZURE ALREADY ORDERED.[6]
ACCORDINGLY, BY VIRTUE OF THE ALIAS WRIT OF SEIZURE,
PETITIONER TOOK POSSESSION OF THE MORTGAGED CHATTELS
OF PRIVATE RESPONDENT. AS A CONSEQUENCE, THE SHERIFF
SEIZED SUBJECT PROPERTIES, DISMANTLED AND REMOVED THEM
FROM THE PREMISES WHERE THEY WERE INSTALLED, DELIVERED
THEM TO PETITIONERS POSSESSION ON MARCH 17, 18 AND 19,
1977 AND ADVERTISED THEM FOR SALE AT PUBLIC AUCTION
SCHEDULED ON MARCH 22, 1977.
ON MARCH 21, 1977, PRIVATE RESPONDENT FILED WITH THE
COURT OF APPEALS A PETITION FOR CERTIORARI AND
PROHIBITION[7] WITH INJUNCTION TO SET ASIDE AND ANNUL THE
QUESTIONED RESOLUTIONS OF THE TRIAL COURT ON THE
GROUND THAT THEY WERE ISSUED IN EXCESS OF JURISDICTION
AND WITH GRAVE ABUSE OF DISCRETION BECAUSE OF THE
LACK OF EVIDENCE AND CLEAR CUT RIGHT TO POSSESSION OF
FIRST NATIONAL CITY BANK (HEREIN PETITIONER) TO THE
MACHINERIES SUBJECT OF THE CHATTEL MORTGAGE.
ON JULY 30, 1982, FINDING THAT THE TRIAL COURT ACTED
WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO EXCESS OR
LACK OF JURISDICTION IN ISSUING THE ASSAILED RESOLUTIONS,
THE COURT OF APPEALS GRANTED THE PETITION, HOLDING THAT
THE PROVISIONS OF THE RULES OF COURT ON REPLEVIN AND
RECEIVERSHIP HAVE NOT BEEN COMPLIED WITH, IN THAT (1)
THERE WAS NO AFFIDAVIT OF MERIT ACCOMPANYING THE
COMPLAINT FOR REPLEVIN; (2) THE BOND POSTED BY CITIBANK
WAS INSUFFICIENT; AND (3) THERE WAS NON-COMPLIANCE
WITH THE REQUIREMENT OF A RECEIVERS BOND AND OATH OF
OFFICE. THE DECRETAL PORTION OF THE ASSAILED DECISION OF
THE COURT OF APPEALS, READS :
WHEREFORE, THE PETITION IS GRANTED. THE QUESTIONED
RESOLUTIONS ISSUED BY THE RESPONDENT JUDGE IN CIVIL CASE
NO. 95991, DATED FEBRUARY 28, 1977 AND MARCH 18, 1977,
TOGETHER WITH THE WRITS AND PROCESSES EMANATING OR
DERIVING THEREFROM, ARE HEREBY DECLARED NULL AND VOID
AB INITIO.
THE RESPONDENT EX-OFFICIO SHERIFF OF QUEZON CITY AND
THE RESPONDENT FIRST NATIONAL CITY BANK ARE HEREBY
ORDERED TO RETURN ALL THE MACHINERIES AND EQUIPMENT
WITH THEIR ACCESSORIES SEIZED, DISMANTLED AND HAULED, TO
THEIR ORIGINAL AND RESPECTIVE PLACES AND POSITIONS IN
THE SHOP FLOORING OF THE PETITIONERS PREMISES WHERE
THESE ARTICLES WERE, BEFORE THEY WERE DISMANTLED, SEIZED
AND HAULED AT THEIR OWN EXPENSE. THE SAID RESPONDENTS
ARE FURTHER ORDERED TO CAUSE THE REPAIR OF THE
CONCRETE FOUNDATIONS DESTROYED BY THEM INCLUDING THE
REPAIR OF THE ELECTRICAL WIRING AND FACILITIES AFFECTED
DURING THE SEIZURE, DISMANTLING AND HAULING.
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THE WRIT OF PRELIMINARY INJUNCTION HERETOFORE IN EFFECT
IS HEREBY MADE PERMANENT. COSTS AGAINST THE PRIVATE
RESPONDENTS.
SO ORDERED[8]
THEREFROM, CITIBANK CAME TO THIS COURT VIA ITS
PRESENT PETITION FOR CERTIORARI, ASCRIBING GRAVE ABUSE
OF DISCRETION TO THE COURT OF APPEALS AND ASSIGNING AS
ERRORS, THAT:
I SEIZURE WAS ISSUED IN ACCORDANCE WITH LAW, THAT IS,
THE RESPONDENT COURT ERRED IN PRACTICALLY AND IN EFFECT
RENDERING JUDGMENT ON THE MERITS AGAINST THE HEREIN
PETITIONER BY ORDERING THE RETURN OF THE MACHINERIES
AND EQUIPMENT AND ITS ACCESSORIES TO THEIR ORIGINAL
AND RESPECTIVE PLACES AND POSITIONS.
II
THE RESPONDENT COURT ERRED IN FINDING THAT THE
COMPLAINT OF THE PETITIONER DID NOT COMPLY WITH THE
PROVISIONS OF SEC. 2, RULE 60 OF THE RULES OF COURT.
III
THAT THE RESPONDENT COURT ERRED IN FINDING THAT THE
BOND POSTED BY THE PETITIONER IS QUESTIONABLE AND/OR
INSUFFICIENT.
IV
THE RESPONDENT COURT ERRED IN FINDING THAT THE
PETITIONER DID NOT COMPLY WITH THE PROVISIONS OF SEC. 5,
RULE 59 BY FAILING TO POST A RECEIVERS BOND.
V (D) THE ACTUAL VALUE OF THE PROPERTY.
THE RESPONDENT ERRED IN FINDING THAT THE HON. JORGE R.
COQUIA ACTED WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO EXCESS OR LACK OF JURISDICTION IN DEALING
WITH THE SITUATION.
I
ANENT THE FIRST ASSIGNED ERROR, PETITIONER CONTENDS
THAT THE COURT OF APPEALS, BY NULLIFYING THE WRIT OF
SEIZURE ISSUED BELOW, IN EFFECT, RENDERED JUDGMENT ON
THE MERITS AND ADJUDGED PRIVATE RESPONDENT ANAMA AS
THE PERSON LAWFULLY ENTITLED TO THE POSSESSION OF THE
PROPERTIES SUBJECT OF THE REPLEVIN SUIT. IT IS THEORIZED THAT
THE SAME CANNOT BE DONE, AS THE CASE BEFORE THE COURT
BELOW WAS YET AT TRIAL STAGE AND THE LOWER COURT STILL
HAD TO DETERMINE WHETHER OR NOT PRIVATE RESPONDENT
WAS IN FACT IN DEFAULT IN THE PAYMENT OF HIS OBLIGATION
TO PETITIONER CITIBANK, WHICH DEFAULT WOULD WARRANT
THE SEIZURE OF SUBJECT MACHINERIES AND EQUIPMENT.
THE CONTENTION IS UNTENABLE. A JUDGMENT IS ON THE
MERITS WHEN IT DETERMINES THE RIGHTS AND LIABILITIES OF THE
PARTIES ON THE BASIS OF THE DISCLOSED FACTS, IRRESPECTIVE
OF FORMAL, TECHNICAL OR DILATORY OBJECTIONS, AND IT IS
NOT NECESSARY THAT THERE SHOULD HAVE BEEN A TRIAL. [9] THE
ASSAILED DECISION OF THE COURT OF APPEALS DID NOT MAKE
ANY ADJUDICATION ON THE RIGHTS AND LIABILITIES BETWEEN
CITIBANK AND DOUGLAS ANAMA. THERE WAS NO FINDING YET
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OF THE FACT OF DEFAULT. THE DECISION ONLY RULED ON THE
PROPRIETY OF THE ISSUANCE OF THE WRIT OF SEIZURE BY THE
TRIAL COURT. AS WORDED BY THE RESPONDENT COURT ITSELF,
THE MAIN ISSUES TO BE RESOLVED ARE WHETHER THERE WAS
LACK OR EXCESS OF JURISDICTION, OR GRAVE ABUSE OF
DISCRETION, IN THE ISSUANCE OF THE ORDERS IN QUESTION,
AND THERE IS NO APPEAL NOR ANY PLAIN, SPEEDY, AND
ADEQUATE REMEDY IN THE ORDINARY COURSE OF LAW. [10]
IN RESOLVING THE ISSUE POSED BY THE PETITION, THE
COURT OF APPEALS LIMITED ITS DISPOSITION TO A
DETERMINATION OF WHETHER OR NOT THE ASSAILED ORDER OF
WHETHER THE PROVISIONS OF THE RULES OF COURT ON
DELIVERY OF PERSONAL PROPERTY OR REPLEVIN AS A
PROVISIONAL REMEDY WERE FOLLOWED. THE COURT OF
APPEALS RELIED ON RULE 60 OF THE RULES OF COURT, WHICH
PRESCRIBES THE PROCEDURE FOR THE RECOVERY OF
POSSESSION OF PERSONAL PROPERTY, WHICH RULE, PROVIDES:
SEC. 2. AFFIDAVIT AND BOND. - UPON APPLYING OR SUCH
ORDER THE PLAINTIFF MUST SHOW BY HIS OWN AFFIDAVIT OR
THAT OF SOME OTHER PERSON WHO PERSONALLY KNOWS THE
FACTS:
(A) THAT THE PLAINTIFF IS THE OWNER OF THE PROPERTY
CLAIMED PARTICULARLY DESCRIBING IT, OR IS ENTITLED TO THE
POSSESSION THEREOF;
(B) THAT THE PROPERTY IS WRONGFULLY DETAINED BY THE
DEFENDANT, ALLEGING THE CAUSE OF DETENTION THEREOF
ACCORDING TO HIS BEST OF KNOWLEDGE, INFORMATION AND
BELIEF;
(C) THAT IT HAS NOT BEEN TAKEN FOR A TAX ASSESSMENT OR
FINE PURSUANT TO LAW, OR SEIZED UNDER AN EXECUTION, OR
AN ATTACHMENT AGAINST THE PROPERTY OF THE PLAINTIFF, OR
IS SO SEIZED, THAT IS EXEMPT FROM SUCH SEIZURE; AND
THE PLAINTIFF MUST ALSO GIVE A BOND, EXECUTED TO THE
DEFENDANT IN DOUBLE OF THE VALUE OF THE PROPERTY AS
STATED IN THE AFFIDAVIT AFOREMENTIONED, FOR THE RETURN
OF THE PROPERTY TO THE DEFENDANT OF SUCH SUM AS HE MAY
RECOVER FROM THE PLAINTIFF IN THE ACTION.
THE COURT OF APPEALS DID NOT PASS UPON THE ISSUE OF
WHO, AS BETWEEN DOUGLAS ANAMA AND CITIBANK, IS
ENTITLED TO THE POSSESSION OF SUBJECT MACHINERIES, AS
ASSERTED BY THE LATTER. WHEN IT ORDERED THE RESTORATION
OF THE SAID MACHINERIES TO DOUGLAS ANAMA (NOW THE
PRIVATE RESPONDENT), IT MERELY BROUGHT THE PARTIES TO A
STATUS QUO, BY RESTORING THE DEFENDANT TO THE
POSSESSION OF HIS PROPERTIES, SINCE THERE WAS A FINDING
THAT THE ISSUANCE OF THE WRIT WAS NOT IN ACCORDANCE
WITH THE SPECIFIC RULES OF THE RULES OF COURT.
II
IN ITS SECOND ASSIGNMENT OF ERRORS, PETITIONER
THEORIZES THAT THE COURT OF APPEALS ERRED IN FINDING
THAT IT DID NOT COMPLY WITH SECTION 2, RULE 60 OF THE
RULES OF COURT REQUIRING THE REPLEVIN PLAINTIFF TO
ATTACH AN AFFIDAVIT OF MERIT TO THE COMPLAINT.
PETITIONER MAINTAINS THAT ALTHOUGH THERE WAS NO
AFFIDAVIT OF MERIT ACCOMPANYING ITS COMPLAINT, THERE
WAS NONETHELESS SUBSTANTIAL COMPLIANCE WITH THE SAID
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RULE AS ALL THAT IS REQUIRED TO BE ALLEGED IN THE AFFIDAVIT
OF MERIT WAS SET FORTH IN ITS VERIFIED
COMPLAINT. PETITIONER ARGUES FURTHER THAT
ASSUMING ARGUENDO THAT THERE WAS NON-COMPLIANCE
WITH THE AFFIDAVIT OF MERIT REQUIREMENT, SUCH DEFENSE
CAN NO LONGER BE AVAILED OF BY PRIVATE RESPONDENT
ANAMA AS IT WAS NOT ALLEGED IN HIS ANSWER AND WAS
ONLY BELATEDLY INTERPOSED IN HIS REPLY TO THE PETITIONERS
COMMENT ON THEPETITION FOR CERTIORARI BEFORE THE
COURT OF APPEALS.
PETITIONER IS CORRECT INSOFAR AS IT CONTENDS THAT
SUBSTANTIAL COMPLIANCE WITH THE AFFIDAVIT REQUIREMENT
MAY BE PERMISSIBLE. THERE IS SUBSTANTIAL COMPLIANCE WITH
THE RULE REQUIRING THAT AN AFFIDAVIT OF MERIT TO SUPPORT
THE COMPLAINT FOR REPLEVIN IF THE COMPLAINT ITSELF
CONTAINS A STATEMENT OF EVERY FACT REQUIRED TO BE
STATED IN THE AFFIDAVIT OF MERIT AND THE COMPLAINT IS
VERIFIED LIKE AN AFFIDAVIT. ON THE MATTER OF REPLEVIN,
JUSTICE VICENTE FRANCISCOS COMMENT ON THE RULES OF
COURT, STATES:
ALTHOUGH THE BETTER PRACTICE IS TO KEEP THE AFFIDAVIT AND
PLEADING SEPARATE, IF PLAINTIFFS PLEADING CONTAINS A
STATEMENT OF EVERY FACT WHICH THE STATUTE REQUIRES TO BE
SHOWN IN THE AFFIDAVIT, AND THE PLEADING IS VERIFIED BY
AFFIDAVIT COVERING EVERY STATEMENT THEREIN, THIS WILL BE
SUFFICIENT WITHOUT A SEPARATE AFFIDAVIT; BUT IN NO EVENT
CAN THE PLEADING SUPPLY THE ABSENCE OF THE AFFIDAVIT
UNLESS ALL THAT THE AFFIDAVIT IS REQUIRED TO CONTAIN IS
EMBODIED IN THE PLEADING, AND THE PLEADING IS VERIFIED IN
THE FORM REQUIRED IN THE CASE OF A SEPARATE AFFIDAVIT.
(77 CJS 65 CITED IN FRANCISCO, RULES OF COURT OF THE
PHILIPPINES, VOL. IV-A, P. 383)
AND SIMILARLY, IN THE CASE OF AN ATTACHMENT WHICH
LIKEWISE REQUIRES AN AFFIDAVIT OF MERIT, THE COURT HELD
THAT THE ABSENCE OF AN AFFIDAVIT OF MERIT IS NOT FATAL
WHERE THE PETITION ITSELF, WHICH IS UNDER OATH, RECITES THE
CIRCUMSTANCES OR FACTS CONSTITUTIVE OF THE GROUNDS
FOR THE PETITION.[11]
THE FACTS THAT MUST BE SET FORTH IN THE AFFIDAVIT OF
MERIT ARE (1) THAT PLAINTIFF OWNS THE PROPERTY
PARTICULARLY DESCRIBING THE SAME, OR THAT HE IS ENTITLED
TO ITS POSSESSION; (2) WRONGFUL DETENTION BY DEFENDANT
OF SAID PROPERTY; (3) THAT THE PROPERTY IS NOT TAKEN BY
VIRTUE OF A TAX ASSESSMENT OR FINE PURSUANT TO LAW OR
SEIZED UNDER EXECUTION OR ATTACHMENT OR, IF IT IS SO
SEIZED, THAT IT IS EXEMPT FROM SUCH SEIZURE; AND THE (4) THE
ACTUAL VALUE OF THE PROPERTY.[12]
BUT, AS CORRECTLY TAKEN NOTE OF BY THE COURT OF
APPEALS, PETITIONERS COMPLAINT DOES NOT ALLEGE ALL THE
FACTS THAT SHOULD BE SET FORTH IN AN AFFIDAVIT OF
MERIT. ALTHOUGH THE COMPLAINT ALLEGES THAT PETITIONER IS
ENTITLED TO THE POSSESSION OF SUBJECT PROPERTIES BY VIRTUE
OF THE CHATTEL MORTGAGE EXECUTED BY THE PRIVATE
RESPONDENT, UPON THE LATTERS DEFAULT ON ITS OBLIGATION,
AND THE DEFENDANTS ALLEGED WRONGFUL DETENTION OF THE
SAME, THE SAID COMPLAINT DOES NOT STATE THAT SUBJECT
PROPERTIES WERE NOT TAKEN BY VIRTUE OF A TAX ASSESSMENT
OR FINE IMPOSED PURSUANT TO LAW OR SEIZED UNDER
EXECUTION OR ATTACHMENT OR, IF THEY WERE SO SEIZED, THAT
THEY ARE EXEMPT FROM SUCH SEIZURE.
THEN TOO, PETITIONER STATED THE VALUE OF SUBJECT
PROPERTIES AT A PROBABLE VALUE OF P200,000.00, MORE OR
LESS. PERTINENT RULES REQUIRE THAT THE AFFIDAVIT OF MERIT
SHOULD STATE THE ACTUAL VALUE OF THE PROPERTY SUBJECT
OF A REPLEVIN SUIT AND NOT JUST
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ITS PROBABLE VALUE. ACTUAL VALUE (OR ACTUAL MARKET
VALUE) MEANS THE PRICE WHICH AN ARTICLE WOULD
COMMAND IN THE ORDINARY COURSE OF BUSINESS, THAT IS TO
SAY, WHEN OFFERED FOR SALE BY ONE WILLING TO SELL, BUT
NOT UNDER COMPULSION TO SELL, AND PURCHASED BY
ANOTHER WHO IS WILLING TO BUY, BUT UNDER NO OBLIGATION
TO PURCHASE IT.[13] PETITIONER ALLEGED THAT THE MACHINERIES
AND EQUIPMENT INVOLVED ARE VALUED AT P200,000.00 WHILE
RESPONDENT DENIES THE SAME, CLAIMING THAT PER THE
APPRAISAL REPORT, THE MARKET VALUE OF THE SAID
PROPERTIES IS P1,710,000.00 AND THEIR REPLACEMENT COST
IS P2,342,300.00. PETITIONERS ASSERTION IS BELIED BY THE FACT
THAT UPON TAKING POSSESSION OF THE AFORESAID PROPERTIES,
IT INSURED THE SAME FOR P610,593.74 AND P450,000.00,
SEPARATELY. IT BEARS STRESSING THAT THE ACTUAL VALUE OF
THE PROPERTIES SUBJECT OF A REPLEVIN IS REQUIRED TO BE
STATED IN THE AFFIDAVIT BECAUSE SUCH ACTUAL VALUE WILL BE
THE BASIS OF THE REPLEVIN BOND REQUIRED TO BE POSTED BY
THE PLAINTIFF. THEREFORE, WHEN THE PETITIONER FAILED TO
DECLARE THE ACTUAL VALUE OF THE MACHINERIES AND
EQUIPMENT SUBJECT OF THE REPLEVIN SUIT, THERE WAS NON-
COMPLIANCE WITH SECTION 2, RULE 60 OF THE REVISED RULES
OF COURT.
IT SHOULD BE NOTED, HOWEVER, THAT THE PRIVATE
RESPONDENT INTERPOSED THE DEFENSE OF LACK OF AFFIDAVIT
OF MERIT ONLY IN HIS REPLY TO THE COMMENT OF CITIBANK ON
THE PETITION FOR CERTIORARI WHICH RESPONDENT FILED WITH
THE COURT OF APPEALS. SECTION 2, RULE 9 OF THE REVISED
RULES OF COURT, PROVIDES:
SEC. 2. DEFENSES AND OBJECTIONS NOT PLEADED DEEMED
WAIVED - DEFENSES AND OBJECTIONS NOT PLEADED EITHER IN
A MOTION TO DISMISS OR IN THE ANSWER ARE DEEMED
WAIVED; EXCEPT THE FAILURE TO STATE A CAUSE OF
ACTION WHICH MAY BE ALLEGED IN A LATER PLEADING, X X X.
THIS RULE HAS BEEN REVISED AND AMENDED, AS
FOLLOWS:
SEC. 1. DEFENSES AND OBJECTIONS NOT PLEADED. - DEFENSES
AND OBJECTIONS NOT PLEADED IN A MOTION TO DISMISS OR
IN THE ANSWER ARE DEEMED WAIVED. HOWEVER, WHEN IT
APPEARS FROM THE PLEADINGS OR THE EVIDENCE ON RECORD
THAT THE COURT HAS NO JURISDICTION OVER THE SUBJECT
MATTER, THAT THERE IS ANOTHER ACTION PENDING BETWEEN
THE SAME PARTIES FOR THE SAME CAUSE, OR THAT THE ACTION
IS BARRED BY A PRIOR JUDGMENT OR BY STATUTE OF
LIMITATIONS, THE COURT SHALL DISMISS THE CLAIM.
THUS, ALTHOUGH RESPONDENTS DEFENSE OF LACK OF
AFFIDAVIT OF MERIT IS MERITORIOUS, PROCEDURALLY, SUCH A
DEFENSE IS NO LONGER AVAILABLE FOR FAILURE TO PLEAD THE
SAME IN THE ANSWER AS REQUIRED BY THE OMNIBUS MOTION
RULE.
III
PETITIONER ALSO FAULTS THE COURT OF APPEALS FOR
FINDING THAT THE BOND POSTED BY THE PETITIONER IS
QUESTIONABLE AND/OR INSUFFICIENT. IT IS AVERRED THAT, IN
COMPLIANCE WITH SECTION 2, RULE 60 REQUIRING THE
REPLEVIN PLAINTIFF TO POST A BOND IN DOUBLE THE VALUE OF
THE PROPERTIES INVOLVED, IT FILED A BOND IN THE AMOUNT
OF P400,000.00 WHICH IS TWICE THE AMOUNT OF P200,000.00
DECLARED IN ITS COMPLAINT.
THE COURT REITERATES ITS FINDINGS ON THE SECOND
ASSIGNMENT OF ERRORS, PARTICULARLY ON THE ISSUE OF THE
ACTUAL VALUE OF SUBJECT PROPERTIES AS AGAINST THEIR
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PROBABLE VALUE. PRIVATE RESPONDENT, AT THE ONSET, HAS
PUT INTO ISSUE THE VALUE OF THE SAID PROPERTIES. IN THE
SPECIAL DEFENSES CONTAINED IN HIS ANSWER, PRIVATE
RESPONDENT AVERRED:
THAT WHILE DEFENDANT ADMITS THAT HE EXECUTED A CHATTEL
MORTGAGE IN FAVOR OF PLAINTIFF, HE VIGOROUSLY DENIES
THAT THE MACHINERIES COVERED THEREIN ARE ONLY
WORTH P200,000.00. THE FACT IS THAT PLAINTIFF KNEW FULLY
WELL THAT SAID CHATTELS ARE WORTH NO LESS
THAN P1,000,000.00, SAID DEFENDANT HAVING ACCEDED TO
SAID VALUATION UPON PLAINTIFFS REPRESENTATION THAT IT
WOULD BE NECESSARY TO SPEED UP THE GRANTING OF THE
LOAN.
AS THERE WAS A DISAGREEMENT ON THE VALUATION OF
THE PROPERTIES IN THE FIRST PLACE, PROPER DETERMINATION
OF THE VALUE OF THE BOND TO BE POSTED BY THE PLAINTIFF
CANNOT BE SUFFICIENTLY ARRIVED AT.THOUGH THE RULES
SPECIFICALLY REQUIRE THAT THE NEEDED BOND BE DOUBLE THE
VALUE OF THE PROPERTIES, SINCE PLAINTIFF MERELY
DENOMINATED A PROBABLE VALUE OF P200,000.00 AND FAILED
TO AVER THE PROPERTIES ACTUAL VALUE, WHICH IS CLAIMED
TO BE MUCH GREATER THAN THAT DECLARED BY PLAINTIFF, THE
AMOUNT OF P400,000.00 WOULD INDEED BE INSUFFICIENT AS
FOUND BY THE COURT OF APPEALS. THE RULES OF COURT
REQUIRES THE PLAINTIFF TO GIVE A BOND, EXECUTED TO THE
DEFENDANT IN DOUBLE THE VALUE OF THE PROPERTY AS STATED
IN THE AFFIDAVIT X X X . HENCE, THE BOND SHOULD BE DOUBLE
THE ACTUAL VALUE OF THE PROPERTIES INVOLVED. IN THIS CASE,
WHAT WAS POSTED WAS MERELY AN AMOUNT WHICH WAS
DOUBLE THE PROBABLE VALUE AS DECLARED BY THE PLAINTIFF
AND, THEREFORE, INADEQUATE SHOULD THERE BE A FINDING
THAT THE ACTUAL VALUE IS ACTUALLY FAR GREATER
THAN P200,000.00. SINCE THE VALUATION MADE BY THE
PETITIONER HAS BEEN DISPUTED BY THE RESPONDENT, THE
LOWER COURT SHOULD HAVE DETERMINED FIRST THE ACTUAL
VALUE OF THE PROPERTIES. IT WAS THUS AN ERROR FOR THE
SAID COURT TO APPROVE THE BOND, WHICH WAS BASED
MERELY ON THE PROBABLE VALUE OF THE PROPERTIES.
IT SHOULD BE NOTED THAT A REPLEVIN BOND IS INTENDED
TO INDEMNIFY THE DEFENDANT AGAINST ANY LOSS THAT HE
MAY SUFFER BY REASON OF ITS BEING COMPELLED TO
SURRENDER THE POSSESSION OF THE DISPUTED PROPERTY
PENDING TRIAL OF THE ACTION.[14] THE SAME MAY ALSO BE
ANSWERABLE FOR DAMAGES IF ANY WHEN JUDGMENT IS
RENDERED IN FAVOR OF THE DEFENDANT OR THE PARTY
AGAINST WHOM A WRIT OF REPLEVIN WAS ISSUED AND SUCH
JUDGMENT INCLUDES THE RETURN OF THE PROPERTY TO
HIM.[15] THUS, THE REQUIREMENT THAT THE BOND BE DOUBLE THE
ACTUAL VALUE OF THE PROPERTIES LITIGATED UPON. SUCH IS
THE CASE BECAUSE THE BOND WILL ANSWER FOR THE ACTUAL
LOSS TO THE PLAINTIFF, WHICH CORRESPONDS TO THE VALUE
OF THE PROPERTIES SOUGHT TO BE RECOVERED AND FOR
DAMAGES, IF ANY.
PETITIONER ALSO MAINTAINS THAT, ASSUMING FOR THE
SAKE OF ARGUMENT THAT ITS REPLEVIN BOND WAS GROSSLY
INADEQUATE OR INSUFFICIENT, THE RECOURSE OF THE
RESPONDENT SHOULD BE TO POST A COUNTERBOND OR A
REDELIVERY BOND AS PROVIDED UNDER SECTION 5 OF RULE 60.
SECTIONS 5 AND 6, RULE 60 OF THE RULES OF COURT,
READ:
SEC. 5. RETURN OF PROPERTY. - IF THE DEFENDANT OBJECTS TO
THE SUFFICIENCY OF THE PLAINTIFFS BOND, OR OF THE SURETY
OR SURETIES THEREON, HE CANNOT REQUIRE THE RETURN OF THE
PROPERTY AS IN THIS SECTION PROVIDED; BUT IF HE DOES NOT
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SO OBJECT, HE MAY, AT ANY TIME BEFORE THE DELIVERY OF
THE PROPERTY TO THE PLAINTIFF, IF SUCH DELIVERY BE
ADJUDGED, AND FOR THE PAYMENT OF SUCH SUM TO HIM AS
MAY BE RECOVERED AGAINST THE DEFENDANT, AND BY
SERVING A COPY OF SUCH BOND ON THE PLAINTIFF OR HIS
ATTORNEY.
SEC. 6. DISPOSITION OF PROPERTY BY OFFICER. - IF WITHIN FIVE
(5) DAYS AFTER THE TAKING OF THE PROPERTY BY THE OFFICER,
THE DEFENDANT DOES NOT OBJECT TO THE SUFFICIENCY OF THE
BOND, OR OF THE SURETY OR SURETIES THEREON, OR REQUIRE
THE RETURN OF THE PROPERTY AS PROVIDED IN THE LAST
PRECEDING SECTION; OR IF THE DEFENDANT SO OBJECTS, AND
THE PLAINTIFFS FIRST OR NEW BOND IS APPROVED; OR IF THE
DEFENDANT SO REQUIRES, AND HIS BOND IS OBJECTED TO AND
FOUND INSUFFICIENT AND HE DOES NOT FORTHWITH FILE AN
APPROVED BOND, THE PROPERTY SHALL BE DELIVERED TO THE
PLAINTIFF, THE OFFICER MUST RETURN IT TO THE DEFENDANT.
THE COURT HELD IN A PRIOR CASE [16] THAT THE REMEDIES
PROVIDED UNDER SECTION 5, RULE 60, ARE ALTERNATIVE
REMEDIES. XXX IF A DEFENDANT IN A REPLEVIN ACTION WISHES
TO HAVE THE PROPERTY TAKEN BY THE SHERIFF RESTORED TO
HIM, HE SHOULD, WITHIN FIVE DAYS FROM SUCH TAKING, (1)
POST A COUNTER-BOND IN DOUBLE THE VALUE OF SAID
PROPERTY, AND (2) SERVE PLAINTIFF WITH A COPY THEREOF,
BOTH REQUIREMENTS AS WELL AS COMPLIANCE THEREWITH
WITHIN THE FIVE-DAY PERIOD MENTIONED BEING
MANDATORY.[17] THIS COURSE OF ACTION IS AVAILABLE TO THE
DEFENDANT FOR AS LONG AS HE DOES NOT OBJECT TO THE
SUFFICIENCY OF THE PLAINTIFFS BOND.
CONFORMABLY, A DEFENDANT IN A REPLEVIN SUIT MAY
DEMAND THE RETURN OF POSSESSION OF THE PROPERTY
REPLEVINED BY FILING A REDELIVERY BOND EXECUTED TO THE
PLAINTIFF IN DOUBLE THE VALUE OF THE PROPERTY AS STATED IN
THE PLAINTIFFS AFFIDAVIT WITHIN THE PERIOD SPECIFIED IN
SECTIONS 5 AND 6.
ALTERNATIVELY, THE DEFENDANT MAY OBJECT TO THE
SUFFICIENCY OF THE PLAINTIFFS BOND, OR OF THE SURETY OR
SURETIES THEREON; BUT IF HE DOES SO, HE CANNOT REQUIRE
THE RETURN OF THE PROPERTY BY POSTING A COUNTER-BOND
PURSUANT TO SECTIONS 5 AND 6.[18]
IN THE CASE UNDER CONSIDERATION, THE PRIVATE
RESPONDENT DID NOT OPT TO CAUSE REDELIVERY OF THE
PROPERTIES TO HIM BY FILING A COUNTER-BOND PRECISELY
BECAUSE HE OBJECTED TO THE SUFFICIENCY OF THE BOND
POSTED BY PLAINTIFF. THEREFORE, HE NEED NOT FILE A
COUNTER-BOND OR REDELIVERY BOND. WHEN SUCH
OBJECTION WAS NOT GIVEN DUE COURSE IN THE COURT
BELOW - WHEN, INSTEAD OF REQUIRING THE PLAINTIFF TO POST
A NEW BOND, THE COURT APPROVED THE BOND IN THE
AMOUNT OF P400,000.00, CLAIMED BY RESPONDENT TO BE
INSUFFICIENT, AND ORDERED THE SEIZURE OF THE PROPERTIES -
RECOURSE TO A PETITION FOR CERTIORARI BEFORE THE COURT
OF APPEALS ASSAILING SUCH ORDER IS PROPER UNDER THE
CIRCUMSTANCES.
IV
AS ITS FOURTH ASSIGNMENT OF ERRORS, PETITIONER
CONTENDS THAT THE COURT OF APPEALS MADE AN ERROR OF
JUDGMENT IN FINDING THAT THE PETITIONER DID NOT COMPLY
WITH THE PROVISIONS OF SECTION 5, RULE 59 BY FAILING TO
POST A RECEIVERS BOND. PETITIONER CONTENDS THAT
ALTHOUGH IT IS IN AGREEMENT WITH THE COURT OF APPEALS
THAT A RECEIVERS BOND IS SEPARATE AND DISTINCT FROM A
REPLEVIN BOND, UNDER THE CIRCUMSTANCES IT WAS NOT
REQUIRED TO FILE A RECEIVERS BOND BECAUSE IT DID NOT
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ASSUME RECEIVERSHIP OVER THE PROPERTIES. IT IS FURTHER
ARGUED THAT ASSUMING THAT IT DID ASSUME RECEIVERSHIP,
THE CHATTEL MORTGAGE EXPRESSLY PROVIDES, THAT:
IN CASE THE MORTGAGEE INSTITUTES PROCEEDINGS,
JUDICIALLY OR OTHERWISE, FOR THE FORECLOSURE OF THIS
CHATTEL MORTGAGE, OR TO ENFORCE ANY OF ITS RIGHTS
HEREUNDER, THE MORTGAGEE SHALL BE ENTITLED AS A MATTER
OF RIGHT TO THE APPOINTMENT OF A RECEIVER, WITHOUT
BOND, OF THE MORTGAGED PROPERTIES AND OF SUCH OTHER
PROPERTIES, REAL OR PERSONAL, CLAIMS AND RIGHTS OF THE
MORTGAGOR AS SHALL BE NECESSARY OR PROPER TO ENABLE
THE SAID RECEIVER TO PROPERLY CONTROL AND DISPOSE OF
THE MORTGAGED PROPERTIES.[19]
THE ORDER OF THE TRIAL COURT DATED MARCH 24, 1975
PROVIDED, AMONG OTHERS, THAT THE PROPERTIES SHALL BE
UNDER JOINT MANAGEMENT FOR A PERIOD OF TEN DAYS,
AFTER WHICH PERIOD THE BANK, BY VIRTUE OF THE
STIPULATIONS UNDER THE CHATTEL MORTGAGE, BECOMES THE
RECEIVER TO PERFORM ALL THE OBLIGATIONS AS SUCH
RECEIVER AND IN THE EVENT THAT THE BANK DECIDES NOT TO
TAKE OVER THE RECEIVERSHIP, THE JOINT MANAGEMENT
CONTINUES.[20]
FROM THE EVIDENCE ON RECORD, IT IS PALPABLY CLEAR
THAT PETITIONER CITIBANK DID, IN FACT, ASSUME
RECEIVERSHIP. A LETTER[21] DATED APRIL 1, 1975 SENT BY
PETITIONER TO THE PRIVATE RESPONDENT, READS:
APRIL 1, 1975
ANAMA ENGINEERING SERVICE GROUP
114 R. LAGMAY STREET
SAN JUAN, RIZAL
ATTENTION: MR. DOUGLAS ANAMA
GENTLEMEN:
PURSUANT TO THE COURT ORDER, WE HAVE DECIDED TO TAKE
OVER YOUR MACHINE SHOP AS RECEIVER.
WE ARE HEREBY APPOINTING MR. ARTEMIO T. GONZALES AS
OUR REPRESENTATIVE.
VERY TRULY YOURS,
FIRST NATIONAL CITY BANK
BY:
P.R. REAL, JR.
ASSISTANT MANAGER
PETITIONER CANNOT THEREFORE DENY THAT NINE DAYS
AFTER THE TRIAL COURT ISSUED THE ORDER OF RECEIVERSHIP, IT
INFORMED THE PRIVATE RESPONDENT THAT IT WOULD, AS IT DID,
ASSUME RECEIVERSHIP.
THE COURT OF APPEALS FOUND THAT THE REQUIREMENTS
OF SECTION 5, RULE 59 ON RECEIVERSHIP WERE NOT COMPLIED
WITH BY THE PETITIONER, PARTICULARLY THE FILING OR POSTING
OF A BOND AND THE TAKING OF AN OATH.
IT SHOULD BE NOTED THAT UNDER THE OLD RULES OF
COURT WHICH WAS IN EFFECT AT THE TIME THIS CASE WAS STILL
AT TRIAL STAGE, A BOND FOR THE APPOINTMENT OF A
RECEIVER WAS NOT GENERALLY REQUIRED OF THE APPLICANT,
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EXCEPT WHEN THE APPLICATION WAS MADE EX
PARTE.[22] THEREFORE, PETITIONER WAS NOT ABSOLUTELY
REQUIRED TO FILE A BOND. BESIDES, AS STIPULATED IN THE
CHATTEL MORTGAGE CONTRACT BETWEEN THE PARTIES,
PETITIONER, AS THE MORTGAGEE, IS ENTITLED TO THE
APPOINTMENT OF A RECEIVER WITHOUT A BOND.
HOWEVER, THE COURT OF APPEALS WAS RIGHT IN
FINDING A DEFECT IN SUCH ASSUMPTION OF RECEIVERSHIP IN
THAT THE REQUIREMENT OF TAKING AN OATH HAS NOT BEEN
COMPLIED WITH. SECTION 5, RULE 59, STATES:
SEC. 5 OATH AND BOND OF RECEIVER - BEFORE ENTERING
UPON HIS DUTIES, THE RECEIVER MUST BE SWORN TO PERFORM
THEM FAITHFULLY, AND MUST FILE A BOND, EXECUTED TO SUCH
PERSON AND IN SUCH SUM AS THE COURT OR JUDGE MAY
DIRECT, TO THE EFFECT THAT HE WILL FAITHFULLY DISCHARGE
THE DUTIES OF RECEIVER IN THE ACTION AND OBEY THE ORDERS
OF THE COURT THEREIN.
CONSEQUENTLY, THE TRIAL COURT ERRED IN ALLOWING
THE PETITIONER TO ASSUME RECEIVERSHIP OVER THE MACHINE
SHOP OF PRIVATE RESPONDENT WITHOUT REQUIRING THE
APPOINTED RECEIVER TO TAKE AN OATH.
V
IN LIGHT OF THE FOREGOING, THE ANSWER TO THE FIFTH
ASSIGNMENT OF ERRORS IS IN THE NEGATIVE. FOR
ERRONEOUSLY ISSUING THE ALIAS WRIT OF SEIZURE
WITHOUT INQUIRING INTO THE SUFFICIENCY OF THE REPLEVIN
BOND AND FOR ALLOWING PETITIONER TO ASSUME
RECEIVERSHIP WITHOUT THE REQUISITE OATH, THE COURT OF
APPEALS APTLY HELD THAT THE TRIAL COURT ACTED WITH
GRAVE ABUSE OF DISCRETION IN DEALING WITH THE SITUATION.
UNDER THE REVISED RULES OF COURT, THE PROPERTY
SEIZED UNDER A WRIT OF REPLEVIN IS NOT TO BE DELIVERED
IMMEDIATELY TO THE PLAINTIFF.[23] THIS IS BECAUSE A POSSESSOR
HAS EVERY RIGHT TO BE RESPECTED IN ITS POSSESSION AND
MAY NOT BE DEPRIVED OF IT WITHOUT DUE PROCESS. [24]
AS ENUNCIATED BY THIS COURT IN THE CASE OF FILINVEST
CREDIT CORPORATION VS. COURT OF APPEALS,[25]
THE REASON WHY THE LAW DOES NOT ALLOW THE CREDITOR TO
POSSESS HIMSELF OF THE MORTGAGED PROPERTY WITH
VIOLENCE AND AGAINST THE WILL OF THE DEBTOR IS TO BE
FOUND IN THE FACT THAT THE CREDITORS RIGHT OF POSSESSION
IS CONDITIONED UPON THE FACT OF DEFAULT, AND THE
EXISTENCE OF THIS FACT MAY NATURALLY BE THE SUBJECT OF
CONTROVERSY. THE DEBTOR, FOR INSTANCE, MAY CLAIM IN
GOOD FAITH, AND RIGHTLY OR WRONGLY, THAT THE DEBT IS
PAID, OR THAT FOR SOME OTHER REASON THE ALLEGED
DEFAULT IS NONEXISTENT. HIS POSSESSION IN THIS SITUATION IS
AS FULLY ENTITLED TO PROTECTION AS THAT OF ANY OTHER
PERSON, AND IN THE LANGUAGE OF ARTICLE 446 OF THE CIVIL
CODE, HE MUST BE RESPECTED THEREIN. TO ALLOW THE
CREDITOR TO SEIZE THE PROPERTY AGAINST THE WILL OF THE
DEBTOR WOULD MAKE THE FORMER TO A CERTAIN EXTENT BOTH
JUDGE AND EXECUTIONER IN HIS OWN CAUSE - A THING WHICH
IS INADMISSIBLE IN THE ABSENCE OF UNEQUIVOCAL
AGREEMENT IN THE CONTRACT ITSELF OR EXPRESS PROVISION
TO THE EFFECT IN THE STATUTE.
WHEREFORE, FOR LACK OF MERIT, THE PETITION IS HEREBY
DISMISSED. NO PRONOUNCEMENT AS TO COSTS.
SO ORDERED.
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ROMERO (CHAIRMAN), VITUG,
PANGANIBAN, AND GONZAGA-REYES, JJ., CONCUR.
SECOND DIVISION
[G.R. NO. 111357. JUNE 17, 1997]
TRADERS ROYAL BANK, PETITIONER, VS. INTERMEDIATE APPELLATE
COURT AND HEIRS OF THE LATE JOSE C.
TAYENGCO, RESPONDENTS.
RESOLUTION
ROMERO, J.:
THE FACTUAL ASPECTS OF THIS CASE HAVE ALREADY BEEN
RESOLVED BY THIS COURT IN G.R. NO. 63855,[1] WHEREIN WE
RULED THE DECEASED SPOUSES JOSE AND SALVACION
TAYENGCO TO BE THE LAWFUL OWNERS OF THE PROPERTIES
UNDER RECEIVERSHIP, AND G.R. NO. 60076,[2] WHERE WE
AFFIRMED THE VALIDITY OF THE APPOINTMENT OF PETITIONER
TRADERS ROYAL BANK (TRB) AS RECEIVER PENDENTE LITE.
IN VIEW OF THESE RULINGS, THE RECEIVERSHIP
PROCEEDING WAS DULY TERMINATED. THUS, TRB RENDERED ITS
FINAL ACCOUNTING OF THE FUNDS UNDER RECEIVERSHIP
WHEREIN IT RETAINED THE AMOUNT OF P219,016.24 AS ITS
RECEIVER'S FEE, INSTEAD OF TURNING OVER THE ENTIRE FUND
TO THE TAYENGCOS. THE REGIONAL TRIAL COURT OF ILOILO,
BRANCH 5, IN AN ORDER DATED JULY 5, 1988, APPROVED THE
FINAL ACCOUNTING SUBMITTED BY TRB, INCLUDING THE
DEDUCTION OF ITS FEE FROM THE FUND UNDER RECEIVERSHIP.
THE TAYENGCOS ASSAILED SAID ORDER BEFORE THE
COURT OF APPEALS, [3] CONTENDING THAT TRB'S
COMPENSATION SHOULD HAVE BEEN CHARGED AGAINST THE
LOSING PARTY AND NOT FROM THE FUNDS UNDER
RECEIVERSHIP.
IN RESOLVING THIS ISSUE THE COURT OF APPEALS, [4] IN ITS
DECISION DATED FEBRUARY 12, 1993, RULED THAT TRB CANNOT
DEDUCT ITS FEE FROM THE FUNDS UNDER ITS RECEIVERSHIP
SINCE THIS MUST BE SHOULDERED BY THE LOSING PARTY OR
EQUALLY APPORTIONED AMONG THE PARTIES-LITIGANTS.
CONSEQUENTLY, TRB WAS ORDERED TO RETURN
THE P219,016.24 TO THE TAYENGCOS, AND THE LOSING PARTIES,
CU BIE, ET AL., WERE HELD SOLELY LIABLE FOR TRB'S
COMPENSATION.[5] TRB FILED A MOTION FOR
RECONSIDERATION, BUT THIS WAS DENIED BY THE APPELLATE
COURT IN ITS RESOLUTION DATED AUGUST 17, 1993. [6]
IN THIS APPEAL, TRB RAISES THE FOLLOWING ERRORS
ALLEGEDLY COMMITTED BY THE COURT OF APPEALS:
1. THE HON. IAC (SHOULD BE CA) ERRED WHEN IT RENDERED
THE JUDGMENT AND RESOLUTION ORDERING THE RETURN
BY TRB OF RECEIVER'S FEE OF P219,016.24 TO THE HEIRS OF JOSE
TAYENGCO, AS IT REVERSED
THE DECISION OF THE SUPREME COURT IN THE CASE OF JOSE
TAYENGCO VS. HON. ILARDE, TRB, ET AL., GR. NO. 60076,
WHICH ORDERED THE TRIAL COURT TO "SETTLE THE ACCOUNT
OF THE RECEIVER, TRB" TO THEREAFTER DISCHARGE THE
RECEIVER AND CHARGED AS COST AGAINST THE LOSING
PARTY;
2. THE HON. IAC HAD NO JURISDICTION IN CA-GR. 21423 AND
ERRED IN KNOWINGLY TAKING COGNIZANCE AND RENDERING
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THE JUDGMENT AND RESOLUTION ON THE ISSUE OF THE
PAYMENT OF RECEIVER'S FEE TO TRB SINCE THE SAME SUBJECT
MATTER WAS ALREADY WITHIN THE JURISDICTION OF THE
SUPREME COURT IN GR. NO. 60076;
3. THE HON. IAC ERRED WHEN IT RENDERED THE JUDGMENT
AND RESOLUTION WHICH REVERSED THE FINAL SUPREME COURT
DECISION IN GR. NO. 60076 ON THE PAYMENT OF THE
RECEIVER'S FEE TO TRB AS IT VIOLATED THE RULE ON
"BAR BY FINAL JUDGMENT".[7] (UNDERSCORING SUPPLIED)
TRB'S ASSIGNMENT OF ERRORS SUBMITS FOR RESOLUTION
TWO VITAL ISSUES: (1) IS THE COURT OF APPEALS DECISION
DATED FEBRUARY 12, 1993 BARRED BY RES JUDICATA BY VIRTUE
OF OUR RULING IN G.R. NO. 60076 RECOGNIZING THE
PROPRIETY OF TRB'S APPOINTMENT AS RECEIVER? (2) WHO IS
RESPONSIBLE FOR TRB'S RECEIVER'S FEE?
WITH RESPECT TO THE FIRST ASSIGNED ERROR, WE ARE NOT
PERSUADED.
THE ELEMENTS OF RES JUDICATA ARE: (1) THE PREVIOUS
JUDGMENT HAS BECOME FINAL; (2) THE PRIOR JUDGMENT WAS
RENDERED BY A COURT HAVING JURISDICTION OVER THE
MATTER AND PARTIES; (3) THE FIRST JUDGMENT WAS MADE ON
THE MERITS; AND (4) THERE WAS SUBSTANTIAL IDENTITY OF
PARTIES, SUBJECT MATTER, AND CAUSE OF ACTION, AS
BETWEEN THE PRIOR ANDSUBSEQUENT ACTIONS. [8]
THE DIFFERENCE BETWEEN THE TWO CAUSES OF ACTION IS
UNMISTAKABLE. IN G.R. NO. 60076, THE PETITION WAS FOR THE
ANNULMENT OF THE TRIAL COURT'S ORDER REQUIRING
TAYENGCO TO RENDER AND SUBMIT AN ACCOUNTING OF THE
RENTAL OF THE BUILDINGS AND APARTMENTS, WHILE C.A. G. R.
CV NO. 21423 WAS AN APPEAL QUESTIONING THE ORDER OF
THE TRIAL COURT AUTHORIZING THE DEDUCTION BY TRB OF ITS
COMPENSATION FROM THE RECEIVERSHIP FUNDS. THERE IS
CLEARLY NO IDENTITY OF CAUSES OF ACTION HERE. CLEARLY,
THE LAST ELEMENT OF RES JUDICATA IS ABSENT IN THE CASE AT
BAR.
PROCEDURAL OBSTACLES ASIDE, WE NOW ANSWER THE
PRINCIPAL QUERY POSED IN THE INSTANT PETITION.
NOBODY QUESTIONS THE RIGHT OF TRB TO RECEIVE
COMPENSATION. SECTION 8, RULE 59 OF THE RULES OF COURT,
HOWEVER, EXPLICITLY PROVIDES FOR THE MANNER IN WHICH IT
SHALL BE PAID FOR ITS SERVICES, TO WIT:
"SEC.
8. TERMINATION OF RECEIVERSHIP; COMPENSATION OF RECEIVE
R.- WHENEVER THE COURT, OF ITS OWN MOTION OR ON THAT
OF EITHER PARTY, SHALL DETERMINE THAT THE NECESSITY FOR A
RECEIVER NO LONGER EXISTS, IT SHALL, AFTER DUE NOTICE TO
ALL INTERESTED PARTIES AND HEARING, SETTLE THE ACCOUNTS
OF THE RECEIVER, DIRECT THE DELIVERY OF THE FUNDS AND
OTHER PROPERTY IN HIS HANDS TO THE PERSONS ADJUDGED
ENTITLED TO RECEIVE THEM, AND ORDER THE DISCHARGE OF
THE RECEIVER FROM FURTHER DUTY AS SUCH. THE
COURT SHALL ALLOW THE RECEIVER SUCH REASONABLE COMP
ENSATION AS THE CIRCUMSTANCES OF THE CASE
WARRANT, TO BETAXED AS COSTS AGAINST THE DEFEATED PART
Y, OR APPORTIONED, AS JUSTICE REQUIRES." (UNDERSCORING
SUPPLIED)
IT IS, THEREFORE, CLEAR THAT WHEN THE SERVICES OF A
RECEIVER WHO HAS BEEN PROPERLY APPOINTED TERMINATES,
HIS COMPENSATION IS TO BE CHARGED AGAINST THE DEFEATED
PARTY, OR THE PREVAILING LITIGANT MAY BE MADE TO SHARE
THE EXPENSE, AS JUSTICE REQUIRES. CONSEQUENTLY, THE TRIAL
COURT'S ORDER APPROVING TRB'S COMPENSATION TO
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BE CHARGED SOLELY AGAINST THEFUNDS UNDER ITS

RECEIVERSHIP IS WITHOUT LEGAL JUSTIFICATION; HENCE, IT WAS
CORRECTLY REVERSED BY THE COURT OF APPEALS.

IN VIEW OF THE FOREGOING, THE DECISION APPEALED

FROM IS AFFIRMED. COSTS AGAINST PETITIONER.

SO ORDERED.

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